Frequently asked questions about equipment leasing
A lease is a type of rental agreement under which the owner of the equipment allows the user to rent the equipment in exchange for periodic lease payments. Equipment leasing is prevalent in almost every manufacturing business. It is estimated that around 80 percent of manufacturing companies lease equipment under an agreement. The following article answers some of the most frequently asked questions about equipment leasing. Read on to find out more.

Which are the popular companies for financial equipment leasing?
If you are new to the field of equipment leasing, then looking for financing options for equipment leasing can be a confusing and a tedious job.

• Bankers Capital – Headquartered in Northborough, Massachusetts, Bankers Capital is one of the most popular financial resourcing company for equipment leasing. They are known to finance manufacturing businesses for equipment leasing irrespective of its size. They also consider businesses with bad credit. According to online reviews, the company increases the collateral requirements instead of ramping up the interest rate of leasing which can dent the business revenue.
• BSB Leasing- This financing company is known to provide the best options for established businesses with a good credit history. Situated out of Englewood, Colorado, BSB Leasing has a wide option of lending companies.

How to choose an equipment leasing company?
Following three factors will help you choose a good leasing company:

• Reputation – This is the most important factor to consider when looking for an equipment leasing company. Prefer a leasing company that is a member of governing bodies, like The Equipment Leasing Association, to ensure best practices and ethical services.
• Understand different lease types – There are several types of equipment lease agreements based on different aspects of capital, operations, etc. It is important to choose the one that fits your bill.
• Experience and expertise – Once you find a leasing company that best suits your business, it is important to consider how long they have been established. If you own a start-up business, then you need to consider if the equipment leasing company has the expertise to offer services to start-up companies.

What mistakes should be avoided while leasing equipment?
Equipment leasing offers opportunities and advantages to businesses, especially tech-oriented businesses, which can help them grow in their field without having to purchase equipment. There are some mistakes that can be avoided to ensure tax benefits and incentives, which can also aid the cash-flow in your business. These mistakes include:

• Not conserving cash-flow- Since equipment leasing does not incur large down payments, not using this as an advantage and failing to conserve cash-flow can put your business under financial risk.
• Overlooking tax benefits- One of the main reasons business owners choose equipment leasing instead of purchasing it is because it regulates the revenue of the business. However, not showing leasing details in your balance sheet can strip off the tax benefits and incentives.
• Contracts with floating rates – Signing equipment leasing contracts with floating rates can strain the cash flow of your business dramatically. Business revenue can take a hit when these floating rates hit the ceiling.

What are the components of a leasing agreement?
Following are the main components of an equipment leasing agreement:

• Lease duration – It is the period during which the equipment is rented. If your equipment needs change frequently, it is sensible to opt for a leasing agreement for a shorter period.
• Market value of the equipment – This is one of the most important factors when opting for equipment leasing. If the market value of the equipment is less than the what is paid in leasing, then it is recommended to purchase the equipment rather than getting it on a lease.
• Cancellations and updating provisions – It is important to consider the equipment lease cancellation and updation policies. There are routine upgradations in the technology of various equipment. An equipment leasing agreement should not incur a large fee for canceling or upgrading an agreement midway.