4 Benefits of Broadcast Equipment Leasing
VidOvation offers our customers flexible payment terms. Many customers choose to make an outright purchase as a CapEx or capital equipment expenditure. The accounting department then amortizes and depreciates the expenditure over time to take advantage of tax incentives.
As an OpEx or operational expenditure, many customers prefer leasing broadcast equipment. Since the lease is an operational expense, in many cases there is an immediate tax deduction. Amortization and depreciation of the expenditure over time are not necessary. In many cases, budgetary approvals are easier for OpEx or operational expenditures. A lease helps preserve your operational cash flow to run your business by spreading the expense over many years.
Many of the video communication systems from VidOvation require a significant financial investment. At VidOvation, we can help you preserve your operational cash flow by spreading the cost out over a 24 to 72 months period.
VidOvation can help you choose the option that’s best for you and your budget. Here are four key benefits of leasing equipment for your business.
- Conserve and Control Cash. Equipment leasing saves your working capital (bank lines) for day-to-day business expenses, business expansions, or unexpected business-related expenses. In addition to saving your working capital, with a lease, you have a pre-determined monthly line item, which can help you budget more effectively. With predictable monthly expenses, you can develop long-term plans for your business with confidence and get your business set up with the equipment you need while keeping your cash flow available for other expenditures.
- Upgrade outdated Equipment. Depending on your business type, equipment leasing can help you stay on top of the latest advances in equipment and technology. How long do you plan to keep the asset? If you’re only planning to keep it for the short term, you may find that leasing is a better alternative than buying it and trying to resell it when you no longer need it. You can also determine the length of your lease, so if you work with technology that changes rapidly, you can take on a short lease to ensure you’re always at the cutting edge in your industry.
- Tax Benefits. Lease financing presents your business with potential tax benefits. In many cases, leasing not only provides businesses with a full deduction of lease payments against current earnings but also preserves working capital that you wouldn’t have access to if you had to purchase your equipment up front. It’s always a great idea to check with your tax advisor to determine the benefits for your business.
- More Attractive Balance Sheet. Monthly lease payments are viewed as a business expense instead of long-term debt. Having little debt on your balance sheet helps you secure financing to fund your business. And who doesn’t love a sexy balance sheet?
Ultimately, a few simple rules of thumb may help you decide to lease or buy. If your equipment requirements are relatively small and you have the money–or can get a low-interest loan–then just buy it. You’ll save money in the long run. However, if you require a substantial amount of equipment, such as computers for your new company’s 10 employees, leasing may be a better option. After all, why tie up a large amount of cash–especially when you could use that money to establish or grow your business? Capital equipment expenditure