For new and established cleaning businesses, one of the biggest decisions that owners face is whether to lease or buy their equipment. Large cleaning equipment like a carpet cleaning machine, scrubber, polisher, sweeper, and commercial vacuum, to name a few, can make a significant impact on a company’s bottom line.
Whether leasing or buying is the better choice all depends on where the business is financially and its long-term goals. We list five benefits of leasing floor cleaning equipment to help you make an informed decision.
1. You can use the additional capital to grow your business
Cleaning equipment costs a pretty penny, ranging from $2,000 to $20,000 and upwards for certain equipment, brands, and models. While it may seem like a good idea to buy equipment because you will own it at the end of its life, keep in mind that it is a depreciating asset. One of the benefits of leasing equipment is that it frees up capital that you can use elsewhere to grow your business, such as marketing efforts, advertising expenses, and staff.
2. It’s a temporary solution until you have the capital
Many businesses want to own their cleaning equipment but can’t afford it yet. Leasing is a great option while you grow the business and make enough to purchase your own. A common misconception about leasing equipment is that you’re “throwing money away”, but it can be more detrimental to a business to spend money that they don’t have in the first place.
3. You can assess the profitability of the equipment
While startups can get a loan to fund the equipment, a big mistake is making a purchase they can’t afford and finding out later on that they don’t use it often enough to make a profit. When leasing equipment, you have the flexibility to evaluate what’s bringing in business and return the equipment that’s simply collecting dust. Furthermore, you won’t be sitting on a depreciating asset that was purchased on debt.
4. You can test new equipment and compare the value
Another mistake that business owners make in their haste to own equipment is to go with the cheaper model or purchase used equipment. Owners risk finding out that the cheaper model doesn’t get the job done as efficiently as they’d like or that the used equipment requires costly repairs and constant maintenance. When you lease equipment, you have the ability to test out different models, sizes, brands, and types, compare their performance and see which ones you prefer.
5. It’s a fixed expense to work within your budget
And last but certainly not least, while you don’t own the equipment, you’ll have regular payments categorized as a fixed expenses. When you lease equipment, you’ll know what your expenses are each month, making it easier to budget and make sound financial decisions. Leasing equipment at a fixed expense is especially beneficial for startups that need flexibility and extra capital initially.
In conclusion, leasing is an excellent option for businesses that need efficient, high-quality cleaning equipment but aren’t yet able to purchase them upfront.
