One way to reduce the amount of start-up capital required for your new business is to lease your equipment rather than buying it. Many equipment manufacturing firms have leasing programs. You can often purchase the equipment at the end of the lease term for its market value or less.

One great advantage to leasing is that the cost of equipment may be “off the balance sheet.” This means that leases can be disclosed as balance sheet footnotes and do not appear as debt even though they represent an ongoing liability. If a bank is weighing a loan proposal you have submitted, the lease commitment will play a relatively minor role in evaluating your debt burden. In addition, a bank is more likely to lend you funds
if you have obtained financing for equipment by leasing it through a third party, rather than asking the bank to meet all your financial needs.

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