There’s no denying that we’re living in uncertain times right now, and you’d be forgiven for taking a risk-averse approach to business strategy.
An increasing number of SMEs are shunning external finance, preferring to remain self-funded through retained profits. In a survey conducted around the time of the EU Referendum, BDRC Continental found that while SMEs were confident they would get approval for external funding, they would rather stay within their means until the economy had a more certain outlook.
But obtaining finance doesn’t always have to carry a risk. In fact, equipment leasing can offer your business greater security from changes in demand, regulation, government and the business environment in general. By fixing rental costs, and the interest to be paid throughout the duration of your contract, you can effectively prepare and plan for the future, reducing tomorrow’s uncertainty.
Keep money in the bank
Equipment often doesn’t come cheap – for an SME, where cash flow is finely balanced, it can feel like too much of a risk to empty the bank account to pay for it. Equipment leasing allows you to avoid major upfront costs that come with outright purchases and alleviate cash flow by spreading the cost.
Often, your agreement can begin with just the initial payment, meaning that buffer you’ve worked hard to build up ‘in case of a rainy day’ can stay where it is.
Avoid waste expenditure
Technology is constantly evolving, which means that a brand new piece of equipment you’ve just bought is already depreciating in value before it’s even generating any money.
Rather than spend a large sum of cash on an asset that will lose value, pay for it as you go and let the leasing company worry about the depreciation. If your agreement allows, you can simply return it at the end of the agreement and upgrade, allowing your business to stay competitive and efficient with the latest equipment.
Protect existing lines of credit
For many SMEs, the reticence to seek external funding is likely borne out of a desire to protect existing lines of credit such as bank loans and overdrafts. With equipment leasing, you can keep those credit lines open for more appropriate times and uses.
With Britain’s economy facing an uncertain future, it’s a sound business decision to want to avoid loans and overdrafts unless they’re essential – using equipment leasing means that you can still think about growth despite Brexit.
Get tax savvy
Something lots of businesses don’t realise about equipment leasing is that finance lease rental payments can be 100% tax deductible against profits and therefore attract tax relief for the full duration of the lease agreement.
So, what are you waiting for? Shire Leasing can provide you with a credit decision in as little as four hours, so you can start preparing for the future immediately – without having to think too much about the ‘what ifs’.
Secure the future of your business today – contact Shire Leasing on 01827 302 066.
