Equipment Leasing

Equipment leasing is when businesses or commercial enterprises obtain needed equipment by leasing such equipment rather than purchasing it. For many businesses, equipment leases as a business loans, are considered to be the most favorable form of acquiring equipment finance because it allows the business to procure needed equipment without having to make the substantial capital outlay usually required to purchase such equipment. Equipment leasing is particularly common in industries where the equipment in question is very expensive and has a relatively short life span and therefore, becomes obsolete and needs to be replaced in a short period of time, usually in the space of a few years. In order to lease office equipment businesses are required to make a regularly scheduled payment, depending upon the terms of the equipment lease, to the lessor in exchange for the use of the equipment. The life span of the equipment usually coincides with the length of the lease and is therefore, often replaced with a new lease covering new equipment upon the expiration of the previous lease. Equipment leasing, a very common form of equipment financing because it is a cost efficient way of obtaining needed equipment, may be available from the equipment manufacturer directly. If not, there are numerous businesses in the equipment financing business that purchase equipment from the manufacturer and lease it to businesses and commercial enterprises that use such equipment in their business.