Growing companies are almost always considering the next acquisition that will expand the company’s ability to do business. Whether it’s new machines to increase the volume of business you do overall or investment in the tools to provide new services that keep expanding your ability to meet customers’ needs, there are some good reasons to consider equipment leasing to finance the deal.

1. Leasing Makes Upgrades Easy

If you’re investing in machines like computers or short-lived productivity tools, you’re probably going to need to upgrade within a few years. In some cases, the life of a loan for the purchase might be longer than the estimated working life of the machines. If you lease them, you can not only set the term to suit your upgrade window, but you can also make upgrading simple by leasing the next model up instead of renewing the original agreement. The financing company then takes away the old machine and delivers the new one, and you just keep working.

2. Leasing Can Help Control Your Tax Exposure

Investing in new equipment means buying a depreciating asset, which has tax implications over time. Leasing, on the other hand, is a direct cost of providing goods and services to customers, just like inventory or supplies for manufacturing goods. That means the entire cost of the lease is deducted from your gross income before taxes are calculated. Used strategically, this can help companies stick to a projected tax cost when coordinated with other cost-controlling measures.

3. Leasing to Own Is an Option

If there is a good chance you will want to keep the machine permanently, but you are not able to manage loan financing because of down payment requirements or other hurdles, leasing can put the machines you need into your hands. If you want to avoid paying for constant renewals, you can ask for an equipment leasing deal that covers the entire cost of the machine plus the investor’s required profit margin. The lease is then modified to include a clause allowing you to acquire the equipment for a nominal cost at the end of the lease term if you choose.

This is great for situations where you do not know for sure that you will upgrade, because it gives you a chance to upgrade into a new lease or to buy the old machine and keep going, and you can make the call near the end of the lease when your circumstances are easier to forecast. If there is one thing a leasing deal brings you, it’s greater control over the machines that power your business.