Most business owners are aware that business income can ebb and flow. There are times when cash flow is high and times when it is almost non-existent. So, what can business owners do to have cash on hand when things get tough? Leverage the value of your equipment with equipment lease buybacks. How?
Many businesses, no matter the industry, have equipment that is used regularly. Be it construction equipment, computers and office equipment, or medical instruments these necessary items hold value. Based on the value this equipment can be sold to a leasing company. The leasing company will, in turn, lease the equipment back to the business. That way the business has both the cash in hand from the sell of the equipment and the equipment itself for continued use in the business.
Although the process may seem complicated initially, there are many benefits from equipment lease buybacks. For instance, instead of the business being responsible for maintenance and upkeep of machinery and equipment the leasing company is now in control of maintenance and repair. Also, when the time comes to upgrade equipment the business owner now has more options. When the lease contract on the equipment is complete, a new lease can be taken on the newest models.
Equipment lease buybacks help businesses financially in other ways as well. The payments on the lease contract can be tax deductible and written off as a business expense, without having to be concerned about the value depreciation of the equipment. Also, existing cash flow is maintained with lease buybacks. Withdrawing cash for new equipment or office space can hurt a businesses bottom line. However, with lease buybacks on equipment the business already owns, the cash flow is maintained and the business can flourish and grow as planned.
The process of equipment lease buybacks is important for the bottom line of your business. It allows you to still have the use of necessary equipment and the added bonus of having more cash in hand to reinvest into your business. The lease payments are tax deductible and the payments are fixed, making managing your monthly budget easier. You no longer have to stress about the maintenance and repair of equipment and can easily upgrade to the newest models when your lease contract has expired. All-in-all equipment lease buybacks are of great benefit to your business and will help you grow as you invest more cash into your company.