It would probably come as a surprise to a small and mid-sized business to discover that Equipment Leasing in the US is a 300 Billion Dollar industry, with huge growth potential.
Think about it: to acquire a business asset, you can either pay cash upfront, get a bank loan or enter into an Equipment Leasing contract.
Equipment Leasing is a form of Asset Based Lending. Not only is it a stand alone financing product, but it can be combined with other financing such as Factoring.
While Factoring generates predictable and faster cash flow, Equipment Leasing allows a business to make strategic decisions as to the USE of that cash. Why? Because it is the use – not the ownership – of the equipment that generates cash, and ultimately profits.
Given the rapid rate of technical obsolescence, a business might decide to lease the equipment rather than pay a wad of cash for it. This allows them to get the most use out of the equipment for the time they need it, while protecting their cash reserves.
© 2007 Sanjeev Aaron Williams & Cashwerks All Rights Reserved
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