Business Financing - What Assets Can You Lease?
Just recently I was offered a chance to finance my company travel costs. I have not actually spoken to the person yet so, I am not sure what is the exact deal. My feeling is that I do finance my travel costs - it's called a credit card. Basically, any asset you have (or non-asset in the case of the travel lease) can be financed by someone if you are willing to pay a high enough interest rate. You may not want to pay a high interest rate if your cash flow is liquid enough, but if you are starting up or have to wait for your receivables (which, BTW, can also be financed), you may not want to tie your cash up in equipment or software. The best rates you will get are from the product seller. Dell, for instance, will give you a better interest rate then Joe Smith's Equipment Lender and Deli. If you lease from Dell and they need to repossess the computers, they have a better chance of high resale value than Joe does. Interestingly enough, you can also lease software. This may seem nonsensical, but if you have 100 computers and want to install Vista on all of them, it would cost $20,000. Like Dell, Microsoft will provide financing. If you have already purchased your hardware and software, you may still be able to find a secondary lender who will be willing to finance the remainder of the assets' life. Be aware though that there are predatory lenders, some are fly by night operations that will require you to put down a processing fee and disappear. Others will include extremely complicated lease terms that will practically guarantee that you will default. If you are interested in going this route, make sure you are dealing with reputable firms, and read the terms of the lease carefully (most will not allow prepayment, for instance). Being creative in financing your company is a good idea, but so is being careful. |
