Equipment Leasing

The right equipment can increase your business productivity, improve efficiency and make a significant improvement to your bottom line. Apart from purchasing, there is another option of equipment leasing. Leasing allows you to enjoy the profit-generating benefits of having your own equipment without the headaches of asset depreciation. This is an ideal financing option for companies looking to increase liquidity and improve cash flow.

Benefits of Equipment Leasing

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Improve Liquidity

As a business owner, cash flow distribution is an important concern. To acquire equipment for your business needs, making a large sum purchase may not be the wisest option. With a low initial down payment, leasing is a more cost-effective option that allows you to acquire equipment. This frees up cash flow for other areas of priority such as business expansion.

2

Free Up Line of Credit

A benefit of equipment leasing is freeing up your lines of credit. From office automation to industrial machines, equipment is essential for many businesses. There are a number of financing arrangements that allow a business to acquire equipment, such as term loans. However, using a term loan to purchase equipment may take up a sizeable proportion of your loan and reduces your line of credit. Equipment leasing frees up your line of credit to obtain additional financing. In addition, equipment leasing uses the equipment itself as collateral. Therefore, any other collateral your business owns can be used to secure additional financing.

3

Flexibility to Upgrade

For some industries, businesses are at a big disadvantage if your equipment becomes obsolete. Apart from the technical competitive edge, equipment is also an extension of your brand and contributes to your customer brand perception. While it is impractical to purchase new equipment every year or two, leasing allows you to constantly equip your company with cutting edge equipment.

PC, Laptop Leasing Promotion

Financing Example

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Company A is an architecture company that deals with design development. Their existing PC and laptops specification can no longer meet most of the latest software requirement and struggle to handle heavy-duty graphic rendering – basically reaching the end of their useful life. They are looking at acquiring 50 brand new laptops for its employees in bid to improve their productivity as well as gaining the additional competitive edge.
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The owners of Company A approached ETHOZ Capital for financing solution as they are reluctant to pay $100,000 upfront to upgrade all the laptops. ETHOZ recommended Company A to consider Equipment Lease programme to fund these laptop upgrades.

Upon agreement, ETHOZ quickly process their application. The whole process is quick and hassle-free. Thus, Company A is able to proceed with their laptop upgrade almost immediately – increasing their employees’ productivity.

ETHOZ has provided Company A the following terms:
Interest Rate : 0% for 2 years Monthly
Repayment : $4,166.67 x 24 months
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In this example, Company A does not have to fork out $100,000 upfront to buy the 50 laptops. Instead, Company A only pays $4,166.67 per month through the Equipment Lease programme and frees up its cash for other uses.

* Disclaimer: Example above is merely shown for illustration purpose to better allow readers to understand the uses of each financing solution. Figures and interest rates listed above are not representative; it may differ based on each company’s requirements and management’s approval. Additional terms and conditions may also apply based on the credit assessment and evaluation conducted during application. ETHOZ Capital Ltd and its employees make no representation or warranty, whether expressed or implied, and accept no responsibility for the completeness or accuracy of the computation.

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