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Need new fitness equipment for your business or organization, but are short on cash? Consider leasing to work within limited budgets or preserve working capital.
What is fitness equipment leasing?
Equipment leasing is basically a loan in which the lender – a bank or other financial institution – buys and owns equipment and then “rents” it to a business or organization. The process is very similar to the popular car lease. Usually, the lender charges a flat monthly rate for a specified number of months in return for use of the equipment. When the lease period ends, the business or organization has the option of:
- Purchasing the equipment for its fair market value
- Continuing to lease the equipment
- Leasing new equipment
- Returning the equipment to the leasing company
What are the benefits?
The major benefit of leasing fitness equipment is the ability to work within a tight budget and to preserve working capital. It allows you to acquire assets with minimal initial expenditures. Because equipment leases do not generally require a down payment, you can obtain the goods you need without significantly affecting your cash flow, allowing more money available for other critical needs.
Another financial benefit of leasing fitness equipment is that lease payments can often be deducted as business expenses on tax returns, reducing the net cost of your lease. Be sure to check with your tax advisor before entering into a lease on how this might apply to your entity. In addition, leases are usually easier to obtain and have more flexible terms than loans for buying equipment. This can be a significant advantage if you have bad credit or need to negotiate a longer payment plan to lower your costs.
Who is it for?
Equipment leasing is appropriate for businesses and organizations of any size and stage of development. They can be used by a start up, with limited revenues, to get up and running. They can be used by established business, with steady revenue streams, to preserve capital for other business investments. Businesses that tend to use equipment with short life spans (i.e. quick obsolescence) may also find leasing beneficial.
Where do you get it?
Equipment leasing opportunities are abundant. Many, if not most, retailers are in partnership with leasing companies. The retailer will likely refer you to their preferred leasing agent to discuss the process, benefits and risks.
Is it right for my business or organization?
Leasing fitness equipment may prove beneficial to your business. To thoroughly understand the pros and cons, it is advised that you consult your accountant prior to entering into a leasing agreement.
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