As the owner of a growing small business, you will need to invest in a variety of crucial assets to allow it to expand into the future.
Whichever asset you are procuring - be it company cars or your business's IT infrastructure - you will be faced with a decision with regards to funding it.
Is it better to purchase the asset outright or opt to lease it instead?
While both options come with their pros and cons, small businesses in particular may find it beneficial to initially lease their items.
Take cars, for example. With a hefty capital outlay usually required from the start to purchase a vehicle, a small business may simply not have the funding to afford such an investment.
A lease, on the other hand, allows you to enjoy full use of the vehicle without the same capital investment worries of an outright purchase. Leases are great for small businesses' cash flow finance in a number of ways - there is no need to have cash tied up in a depreciating asset, for one, while the regular and predictable repayments mean it is easier to budget for your business and manage your cash flow.
Many leasing companies also offer add-ons such as fully maintained leases that cover other aspects of your vehicle's total running costs, for example insurance, registration and maintenance. Although this will obviously cost slightly more, having a third party manage all aspects of your cars means there is one less worry on your mind and your cash flow is even more streamlined.
Before your small business makes its next major investment, you should therefore consider whether leasing at the expense of full ownership may be a better option than buying.
If you'd like to learn how Earlypay's Invoice Finance & Equipment Finance can help you boost your working capital to fund growth or keep on top of day-to-day operations of your business, contact Earlypay's helpful team today on 1300 760 205, visit our sign-up form or contact [email protected].