Comparing a loan to lease is like comparing apples to oranges. Let’s do a quick review of some basic differences between a loan and a lease. A loan is designed for your business to OWN equipment. A lease is usually designed for your business to RENT equipment. Renting equipment may provide some important tax advantages depending on your business. Guardian can even provide your business with the option to own the equipment at the end of lease.
Depending on the loan type, the loan rate may be fixed or floating (variable) and the repayment terms and penalties of cancellation vary. A lease rate is typically always fixed (easy to budget & protects against rate fluctuations) and the repayment terms and penalties of cancellation also vary. Customers (lessees) should always review their specific lease agreement(s) for full details. While Guardian’s lease terms will vary, there are generally no additional penalties for early cancellation. For further information please contact your Guardian representative at 1-855-LEASE-58.
Most business owners want an unsecured business loan for their equipment purchases in order to avoid using their residential real estate as security. But unsecured business loans are difficult to obtain if your business doesn’t have an above average credit history combined with several years of profitability as evidenced in your financial statements. Typically Guardian’s only collateral for its equipment leases is the equipment itself.
When deciding between a lease and a loan, IF your bank’s loan rate is lower than a Guardian lease rate is your additional risk worth the perceived savings? Rather than increasing your exposure at your bank, businesses owners should consider choosing leasing as a better way to finance their business purchases.
Businesses often fail to realize the costs of NOT being able to have the equipment (or vehicle) operational and making them money. If the purchase is designed to make money or save money, then it would make sense that the longer the equipment (or vehicle) is not operating the more costly the purchase becomes. Long delays in arranging financing – especially at a bank – simply make the financing more expensive. Quick, hassle-free credit approvals offered by Guardian Leasing get your business the equipment it needs faster keeping your costs low.
To find out more about Guardian Leasing’s business lease financing services, please contact us at 1-855-LEASE-58 or email us at support@GuardianLeasing.ca.