Equipment Leasing is a method of financing a venture where equipment is leased instead of purchased. For example, a software startup may choose to lease desktops, laptops, servers and other equipment rather than by them outright. Likewise, a delivery company may choose to lease its vans rather than buy them. Leasing has advantage especially for cash flow, as the initial requirements and thus “cash out” is substantially less than that of purchasing outright. Many product suppliers have leasing arrangements. Financial institutions also often have leasing vehicles where the equipment will be purchased and owned by the bank and leased back to the startup company. Interest rates can vary on equipment, ranging from 0 to 18% for some equipment, depending on credit risk.
Providers of equipment leasing include suppliers of equipment themselves, banks, venture leasing funds, and other financial institutions. StudVent will collect sources and reference them for student entrepreneurs.