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Title: We Suggest You To Know Golden Eagle Wedler Leasing
Tags: Golden Eagle Welder Machine
Blog Entry: Many small business owners simply don’t have the cash on hand to purchase new Golden Eagle Welder Machine outright or they don’t want to create cash flow problems – that’s when leasing a piece of business equipment can come in handy. By leasing, you’re basically renting the equipment, just like if you lease a car from the dealership. Your lender purchases whatever piece of equipment you want – a new computer, a dump truck, etc. Then you make payments to the lender of finance company to use that equipment. When your lease term ends, you can choose to renew it, end it or in some cases outright purchase the equipment. Leasing can be a good option for businesses that frequently update their equipment or technology because the lease payments allow you to keep your cash in reserves and pay less while always having new, updated equipment. The Tax Cuts and Jobs Act, passed in December 2017, includes a change that makes leasing even more attractive. According to the IRS, lease payments are 100 percent deductible with no limit. Interest on loans is now only deductible on up to 30 percent of earnings for companies with revenue great than $25 million. So if your business revenue is greater than $25 million and you’ve traditionally deducted 100 percent of interest payments, it may be a good time to consider leasing instead of paying more taxes. However, as you’re debating equipment leasing vs financing, it’s important to acknowledge the potential drawbacks. One reason leasing may not be the best choice is because you never actually own the equipment you rely on. As a result, you can’t sell it to recoup some of your upfront costs. Leased equipment helps your business operations, but it’s not an actual asset on your balance sheet. Lease agreements also typically include terms of usage dictating how you’re allowed to utilize the equipment. For example, when you lease a car you’re expected to keep it in good shape, have all maintenance performed on schedule, and keep the number of miles you drive below a certain threshold. There can be similar terms for equipment leasing. You may find these restrictions limiting, so much so that they diminish the utility and value of new equipment. If you do violate the terms of usage, there can often be significant financial penalties, as well. Since every lease agreement is different, it’s important to carefully scrutinize the details before signing on the dotted line. Some agreements are better than others, and you won’t know exactly how a lease will affect your business until you take a look at the exact terms.