You have options when you need new equipment to get a job done. Whether it’s upgrading your existing setup, adding machines, or accessing specialized tools for a specific job, there are solid reasons to choose equipment leasing over financing with loans or cash purchases, especially if your business is just starting up.

1. You Gain Control Over Your Debt Load

Leasing is the payment of a service fee for access to machines, tools, buildings, or any other asset your company needs. That means it does not count as debt on your credit report, and while your credit score might influence the cost of a lease, it’s not a make-or-break factor. This simple fact allows you to control how much debt you have on your credit report by opting to lease equipment instead of taking out another loan. If you are gearing up to get approved for something big like a real estate purchase and you need tools to earn the money that will go into your down payment, leasing new machines can thread the needle.

2. Leasing Lowers Your Tax Overhead

Debt payments for the purchase of depreciating assets are not usually considered basic costs of goods and services when you calculate your tax bill. Leasing, as a service paid to deliver products and services, does count toward that. If you’re looking to control your tax bill and you have the option between leasing and financing, you can wind up with a lower monthly payment adding to your overhead while you decrease your company’s taxable income if you lease.

3. Equipment Leasing Makes Upgrading Easy

Every business has some equipment that has a short operating life, if only because practically every business these days relies on computers and mobile devices at some point in its operational processes. Computers and phones are not the only things that have short operating lifespans, though, and most machines that fall into this category also receive regular design and feature updates, so it is worthwhile to upgrade after a few years anyway.

When you lease equipment, delivery and removal are the responsibility of your service provider. That means you can simply choose not to renew a lease on aging equipment. Just order the new model and negotiate a fresh deal. You can even use the same service provider to make sure you’re getting the new machines the same day the old ones get carted off. That makes your upgrade path easy to finance and follow through on.