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Equipment Leasing & Equipment Finance Definition

Equipment Leasing Definition provided by entrepenuer.com

Definition: Obtaining the use of machinery, vehicles or other equipment on a rental basis. This avoids the need to invest capital in equipment. Ownership rests in the hands of the financial institution or leasing company, while the business has the actual use of it.

Another way to keep equipment costs down is to lease instead of buy. These days, just about anything can be leased--from computers and heavy machinery to complete offices. The kind of business you're in and the type of equipment you're considering are major factors in determining whether to lease or buy. If you're just starting out and only need one computer, for instance, it probably makes more sense to buy. On the other hand, if you're opening an office that will have several employees and require a dozen computers, you may want to look into leasing.

According to the Equipment Leasing Association of America, approximately 80 percent of U.S. companies lease some or all of their equipment, and there are some thousands of equipment-leasing firms nationwide catering to that demand. For the complete definition click the link below.

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Equipment Finance Definition provided by businessfinance.com.

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Finance the equipment you need rather than purchasing outright:

Equipment finance gives your business the equipment, software, and furniture it needs in order to operate successfully and make a profit. One excellent way to obtain equipment finance is through a lease. A lease is great for businesses because it does not tie up cash, receivables, credit cards, or bank lines.

Equipment finance through a lease is appealing to businesses because they do not need large amounts of collateral in order to get approved. The other major positive is that with a lease the taxes can be expensed. For the rest of the article click the link below.

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Equipment Leasing Definition provided by answers.com

A lease is in essence an extended rental agreement wherein the owner of the equipment (the lessor) allows the user (the lessee) to operate or otherwise make use of the equipment in exchange for periodic lease payments. "There are a number of reasons that companies sometimes prefer to lease equipment rather than buying it," said Richard A. Brealey and Stewart C. Myers in Principles of Corporate Finance. "For example, there may be good tax reasons. If the operator cannot use the depreciation tax shield, it makes sense to sell the equipment to someone who can. Also, the lessor may be better able to bear the risk of obsolescence, or be in a better position to resell secondhand assets. The lessor may be able to offer a very good deal on maintenance. Finally, it may be much less costly in time and effort to arrange a simple lease contract on a standard item of equipment than to arrange a normal loan."

Equipment leasing is a popular option for companies of all sizes. The Equipment Leasing Assocation of America estimates that 80 percent of all companies lease at least some of their equipment, and the organization estimates that firms leased $226 billion worth of goods in 1999. But equipment leasing is particularly favored by many small businesses, which often have future options because of limited capital. "The practice of leasing equipment as a way to make the most efficient use of resources—particularly in times of tight credit—is found in a variety of industries," pointed out Jack Wynn in Nation's Business. "One of the major categories of leased equipment consists of high-technology items such as computers, telecommunications equipment, and diagnostic tools. Another category is low-tech capital equipment, from office equipment and materials-handling machinery to marine cargo containers, trucks, trailers, rail cars, forklifts, and cranes." Finally, lease agreements are popular because they often contain provisions that allow the lessee to purchase the item at the end of the lease period if they so desire. For the complete definition click on the link below.

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