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10 Reasons to Lease Your Material Handling Equipment

In the United States, more than 30% of all capital equipment is acquired through leasing, and almost 80% of all businesses lease a portion of their equipment. There are many advantages to leasing programs rather than just making an outright purchase. If you’re in the market for material handling equipment, Raymond Handling Concepts recommends that you consider the following:

Lower Initial Cash Outlay: You can still obtain expensive equipment but preserve your cash on hand if you need it for another purpose. 

Increased Productivity: Replacing your machinery every few years means that you will consistently have newer equipment which leads to less downtime. Having equipment sidelined can be costly, not only because of production decreases, but also because equipment outages often result in underutilized or idle employees.    

Pay as You Go: Spreading the cost of utilizing an asset over a few years gives you the benefit of allowing your costs to more closely align with your actual use. It also lets you hang on to your cash for a longer period of time, meaning you can use it for opportunities with larger returns. 

No Long-Term Commitment: Leasing allows you to put the equipment through its paces and make sure that it performs to the standards that you expect. If you’re unhappy with it, you can simply return it at the end of the lease term instead of being stuck with it for its useful lifetime.   

Consistent Technology Updates: When you lease, you replace your equipment every couple of years, meaning that you can take advantage of improved technology and new features. In other words, you’ll never get stuck with outdated equipment again. 

Tax Treatment: Operational expenses are fully deductible, as opposed to capital equipment that depreciates. From a tax perspective, leases are often a very good business strategy. 

Consistent Maintenance Costs: Maintenance packages are often built into a lease agreement, meaning that you have a single, predictable monthly cost that covers everything you might encounter with your product. This way you won’t ever have any surprises.

Short Term Business Requirements: When you lease, you can account for short term situations in your business. For instance, if you are building a new distribution center but it has three years left until completion, you can lease equipment for the interim and purchase equipment for your new DC when it’s completed.

Market Flexibility: If you’re expecting a market downturn or recession, you can add the equipment that you need now without being locked in for the life of that equipment. 

Buying Power: With a lease, you can often acquire higher-end equipment than you normally would through a straight purchase. 

If you’re interested in an equipment lease, contact a finance specialist at Raymond Handling Concepts Corporation by calling (800) 675-2500.