A recent study examining why companies lease showed the following percentages:

• 35% chose leasing for cash flow reasons.
• 17% chose for the dollar value.
• 13% chose for the ease and convenience.
• 13% chose for the maintenance options.
• 13% chose for tax benefits.
• 9% chose for the ability to get latest technology and be able to transfer the cost of upgrading to the lessor.

So we can summarize this data in three main categories and look at a little further to understand the advantages leasing can present to you business:

• Cash flow and financial reasons. Leasing enables rental payments to be closely matched to the income produced by the leased equipment.
• Efficiency and convenience. Businesses have come to recognize the value of equipment in its use, not its ownership. They make money by using equipment – ownership being incidental depending on business factors. Additionally, leasing companies offer many services (like acquisition, disposition, maintenance, and upgrading) related to equipment that permit a company to keep its focus on its central business activities, not on dealing with its equipment. Leasing is also especially efficient for certain industries as it protects against technological obsolescence.
• Stimulating investment and serving growth. Federal and state tax laws give incentives to companies to invest in new equipment, but often companies could not take advantage of these incentives if burdened by the expense of new purchases. With leasing, however, depreciation or credit incentives can be used by a leasing company who then passes them on to the lessee in the form of low rental payments.

If you are a startup restaurant and choose to lease your restaurant equipment, you will be able to save a lot of money that would otherwise be spent to purchase it.  Leasing will free up your capital and credit lines and allow your business to have better cash-flow. You will certainly need this cash to cover expenses like payroll.

You may also consider used restaurant equipment leasing, as it might allow you to save even more money up front than buying it brand new. However, leasing used equipment for your restaurant comes with a caveat as most leases will have higher rates, no warranty, and you might end up paying more for maintenance.

Since the restaurant business can be quite tough for startups with most of them shutting their doors within the first three years, it is wise to opt for a lease term shorter than 60 months.

Here is a sample list of commonly leased restaurant equipment:

• Dishwashers
• Ice Machines
• Coffee Makers
• Coolers
• Commercial Freezers
• Commercial Fryers
• Commercial Ovens

Health and fitness is a $15 billion dollar industry and according to IHRSA, health club membership will reach around 50 million by 2010. Without a doubt there is a growing demand for fitness centers, and along with the demand comes fierce competition.  New gyms will need to keep their startup expenses low until they can stabilize their financials. Leasing will allow your business to do just that since it will not only free up your capital but also it will not affect your credit lines – a great advantage over purchasing.

In order to compete in the fitness industry, your business also needs to have the latest equipment available. That means every couple of years you might need to acquire newer models in order to continue to attract new members and stay in the game. By leasing your fitness equipment you will be allowed to get new equipment as soon as your lease expires if you decide to renew it.

Here is a list of commonly leased fitness equipment:

• Multi-stack gyms
• Ellipticals
• Exercise Benches
• Treadmills
• Cyclers
• Steppers
• Free weights

Equipment leasing in general provides many advantages over purchasing the equipment; however, leasing your office equipment gives your business an upper hand on the depreciation of the equipment – a benefit not shared by some types of leasing. As technologies quickly advance, copiers, printers, LCD projectors, and just about any office equipment will decrease in value just as quickly and become obsolete. Office equipment leasing allows you to replace your aging equipment with newer models.

It is also common practice to include equipment maintenance in the lease contract for office equipments like copiers. The maintenance normally covers parts and labors which can save business owners a lot of headaches. Be sure to go over the lease contract and discuss every detail with your broker.  Parts like toner and paper are typically not included, and when it is more often than not you will end up paying more than if you just purchase these consumable items on your own.

Here is a sample list of common leased office equipment:

• Digital Copiers
• Color Copiers
• Laser Printers
• Ink-Jet Printers
• All-in-one Printers
• Plotters
• LCD Projectors
• Scanners
• Fax Machines
• Postage Scales
• Plasma Displays
• Office Desks
• Office Chairs
• File Cabinets