Lack of capital is one of the biggest issues that small businesses struggle with. A recent study published by Professor John Paglia of Pepperdine University showed that 60% of businesses lack the capital to meet their growth targets. A full third of businesses surveyed said that lack of funds was the biggest issue their business faced.
One of the most efficient ways to maximize your available capital is to lease equipment rather than purchasing it outright like novated car lease in USA and Australia . This is particularly important if you are one of the many businesses that are currently struggling with a limited funds. Direct financing of equipment will not only free up capital when done correctly it will also generate positive cash flow for your business.
What Is A Direct Financing Lease ?
With a direct financing lease your company will be buying the equipment from a leasing agent. However the equipment will not be used by your company but rather leased out to another business. By leasing out equipment to your clientèle your business will be able to generate a fresh income stream. With a direct financing lease your business is able to purchase equipment only when they have a client that they can lease it to. This is perfect for businesses that need to have equipment or software available for clients but do not have the resources to hold onto a large inventory that may not even be used. Continue reading