Equipment hire entails obtaining the use of machinery, tools or any kind of equipment through a leasing agreement. The hire of equipment is however not limited to office machinery and tools as it is possible to hire hospital equipment as well as farm equipment. Parties to the lease of equipment i.e. the renter and the lessor usually enters into a contract and agree to terms and conditions specified within it. They are also bound by the terms for the period of the lease. This essentially enables the renter to use the leased equipment for the specified time frame. With the lease of equipment, an individual or business enjoys the benefits that come with its use without having to bear the responsibility that comes with its ownership. Lease of equipment is quite useful especially when one only needs to use the equipment on a temporary basis. The lease charges issued are often dependent on the duration the equipment is in the possession of the renter and not on the duration it is used.
The leasing contract signed often indicates the terms of the lease that the renter has to adhere to such as making arrangements for the picking up and returning of equipment in addition to not showing interest in acquiring the leased equipment.
Lease of equipment is not a new phenomenon as most industries make use of this process. It is however mostly used by new businesses as well as business ventures that are established but have a low working capital. Equipment hire is thus an important process as it enables businesses to access equipment that is up to date while focusing on their growth rather than spending a large amount of cash that could otherwise aid in its growth on purchase of equipment.
Benefits of equipment leasing
A benefit that comes with business equipment leasing is that it exonerates the enterprise from tax liability. This is mainly because the equipment has been hired and is thus not the possession of the enterprise. As such, the business is not legally responsible for taxes charged on the items thereby making more revenue available for expansion prospects.
Another benefit of equipment hire is that it provides a business enterprise with a stress-free way of accessing the latest equipment in the market mainly because most leasing agreements have a provision for the exchange of old equipment with new versions provided that both parties approve of the exchange. This essentially enables businesses to acquire new equipment in the instance that they outgrow the proficiency of old rental equipment.
In the event that leased equipment spoils or malfunctions, it can be replaced quite easily. This is because most companies that lease out equipment often plan for regular maintenance of rented equipment as part of the leasing contract. In the case that equipment malfunctions and it is rather impossible to repair it within the premises of the renter, then the leasing company provides a replacement for the same with no additional costs on the part of the renter.