Ahead of National Small Business Week, which will take place from May 1 to May 7, the Equipment Leasing and Finance Association highlighted key reasons for small businesses to rely on leasing and financing to acquire equipment. Most small businesses need equipment in order to operate and grow, and each company must decide on an acquisition strategy that is right for them. According to the ELFA, a large majority of U.S. businesses — nearly eight in 10 — lease or finance their equipment so they can take advantage of a range of benefits.

“The $900 billion equipment leasing and financing industry helps all types and sizes of commercial businesses acquire the equipment they need to conduct their business operations,” Ralph Petta, president and CEO of the ELFA, said. “For small businesses in particular, which may not have access to as many funding sources, equipment leasing and financing offer flexible, budget-friendly options that can help with cash flow and keep equipment up to date. We’re pleased to share some of the many reasons equipment finance will help ‘equip your business for success.’”

According to the ELFA, equipment leasing and finance is on the rise in 2022. As businesses emerge from the COVID-19 pandemic and ramp up operations to meet a growing economy, here are five key benefits that make equipment finance an advantageous option for small businesses, according to the ELFA:

1. Get 100% financing with no down payment: Unlike with most traditional lenders, it is possible to arrange 100% financing of equipment with no down payment. This allows businesses to hold on to cash, or working capital, and use it for other areas, such as expansion, improvements, marketing and/or research and development.
2. Eliminate the risk of ownership: A business just starting out can use equipment financing to help lessen the uncertainty of investing in a capital asset until it achieves a desired return, increases efficiency, saves costs and/or meets other business objectives.
3. Keep up to date with new technology: To be on the cutting edge and competitive, businesses often need access to new technology. Leases, loans and other financing arrangements enable small businesses to acquire more and better equipment than they could have without financing.
4. Plan expenses for cash flow and business cycle fluctuations: Financing equipment allows for greater certainty in budgeting by setting customized rent payments to match cash flow, even seasonally.
5. Obtain the convenience of product and service bundling: Certain financial products allow businesses to finance the entire cost of equipment, including installation, upfront maintenance, training and software charges, thereby packaging systems and ancillary products and services into a single solution. This makes equipment acquisition easy to manage and frees up businesses to focus on core operations.