Leasing in Business
Introduction
No matter what type of business you are in, you will need some form of business equipment. Whether you need a computer, car, desk, or a piece of dedicated machinery, the right equipment is crucial to the successful running of any business.
The problem with buying equipment is that the costs can be very high, particularly if you need to purchase more than one or two items. Prices for general equipment are often up to several thousand pounds, and dedicated machinery can cost tens or even hundreds of thousands of pounds.
One solution to the huge cost of buying equipment or vehicles is leasing, used by an increasing number of businesses to help them benefit from essential or new equipment, without having to pay the full costs upfront.
What is Leasing?
Leasing a product is similar to renting it; you pay the leasing company each month for the use of the equipment. A contract lasts over a number of years, usually between 2 and 10, depending on the cost and usable life of the product.
This means that you can have the full use (although you do not actually own it) of a piece of equipment without having to pay the full cost of the item in one go. Over the course of the lease, the leasing company will recover the price of the item plus their charges, meaning you only need a small deposit to start the lease.
At the end of lease, you can choose to carry on leasing at a significantly lower rate (often called a Peppercorn Rental), or to sell the product to another person or company. If you sell the item then the proceeds are split between you and the leasing company, the percentages vary significantly depending on the type of product, its lifespan, the amount received, and who the leasing company is.
Some large organisations (such as banks) offer leasing, although the majority of companies are independent, and some are dedicated to one industry or equipment type (e.g. Vehicles).
What Items Can be Leased?
(i) Vehicles
Vehicles are one of the most commonly leased products by businesses, their high cost makes paying for them upfront very difficult for most businesses. Many companies are vehicle leasing specific, and do not lease other forms of equipment.
A great number of vehicles are available through leasing, including; standard cars for travelling employees, company cars, vans, and even specialist vehicles like forklift trucks.
(ii) Office Equipment
Many different types of Office Equipment and Office Supplies are available for leasing. Computers (including laptops), printers, photocopiers and fax machines are just some of the items that are widely available.
Office furniture (particularly those related to computer equipment) is also available for leasing, although it as not widely available as the equipment itself.
(iii) Other Items
Almost any equipment that is used for business purposes can be leased. More specific items such as Dental or Medical and Hospital equipment, engineering and manufacturing equipment, and agricultural equipment are all available.
If a product you require is not listed, many leasing companies will ask you to phone or email them to suggest it; they can then locate the product for you to lease from them.
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