Q: We are looking at equipping a new small business but, so far, have been unable to come up with loans to cover the cost. Some have suggested leasing as a way for us to consider. What thoughts can SCORE provide us about utilizing leasing for our small business?
A: Not only does leasing help you conserve your cash, it also ensures that you don't wind up paying for equipment that quickly becomes obsolete or unsuited for your needs. Also, if you need the equipment only for a short time or special project, leasing saves you the hassle of having to be both a buyer and seller.
There is no limit to the type of equipment available for leasing or the size of the company that can access it. Even one-person operations can lease equipment.
Unlike loans, leases generally do not require a down payment. You're required to finance only the value of the equipment expected to be used during the lease term. Depending on the type of equipment and lease arrangement, you might also be responsible for routine maintenance and other costs. When the lease expires, the equipment goes back to the leasing company, completing your obligation.