Business owners like you consistently weigh the advantages and disadvantages of major purchases or projects. You have to balance cash flow, working capital, and how the expenditure will impact your company both positively and negatively. Therefore, these are circumstances when you may consider equipment leasing.

During Your Startup Phase

When you first start your business, you probably have restricted cash flow. You may have put your cash into the company to get it up and running, and your business doesn’t have adequate credit to purchase all your business equipment unless you sign personal loans and use other personal credit options. However, it is always best to separate your business and personal finances as soon as possible to protect your assets and start building your business credit.

However, you likely need at least some equipment, from computers to manufacturing machinery. Although not every leasing company works with startups, you can find several that do. Leasing is beneficial because you don’t have to come up with a large downpayment and your payments should be lower than a loan payment. You can also negotiate your lease terms, including its longevity.

When Your Business Is Seasonal

Seasonal businesses have uneven cash flows during different parts of the year. For example, a surfing company may have high sales during the late spring, summer, and early fall, but its winter sales could drop off significantly. During this period, you may have difficulty paying regular bills, such as equipment financing payments. In addition, you likely won’t need the equipment you purchased because your production reduces.

When you lease equipment, you can negotiate payment periods. You can pay monthly, bimonthly, quarterly, or yearly. This allows you to move your payments to the seasons when you have the most cash flow. You can also lease the machinery for the seasons you need it.

During Expansive Growth

When your business is in a rapid growth stage, you spend more money on inventory, machinery, and staff. These expenditures can hurt your cash flows and working capital if you don’t manage the process properly. During these periods, it may seem like you can’t keep up with all the changes and the financial cost of these changes.

Equipment leasing can help you curb these costs. In addition, you have access to the newest technology, and you can upgrade your machinery every time your lease term ends.

Learn about all the benefits you have access to through equipment leasing, so you can make the right decision for your business at every stage.