Fitness facilities are everywhere. They offer their community the benefit of a place to improve one’s personal fitness level, while making a wide variety of advanced equipment accessible to just about everyone. To attract a loyal following of fitness-oriented people, it is crucial to provide a wide range of high quality fitness equipment. To buy all the equipment necessary would cost business owners a substantial amount of up-front capital, which is why fitness equipment leasing is a popular option for gym owners everywhere.
When undertaking the acquisition of sophisticated gym equipment, the most important step is to determine the needs of the business. The same can be said for an individual seeking a home fitness equipment hire deal, although obviously the job is much easier when done on a personal level than a business that might require hundreds of pieces of specialist equipment. Before entering into any contractual obligation, decisions need to be made about whether to hire used or new equipment as well as ensuring there is the necessary flooring space to accomodate everything, not to mention whether or not customer demand will be satisfied by the deal.
Fitness Equipment Lease Benefits
To keep pace with the ever-changing advances in products and technologies, many businesses would rather find fitness equipment for hire than taking on all-out purchases. Fitness equipment hire can be financially beneficial and offers several advantages to owners of fitness facilities.
One of the great things about a fitness equipment lease is that it puts less of a strain on cashflow, allowing an individual, family or small business to make a small periodic payment while reaping the benefits of the gear. This frees up funds for other things such as business operation costs or the progressive expansion of the business.
Many business owners also enjoy the tax advantages that go with the hire of fitness equipment. Corporate incomes can by reduced in most cases by claiming the lease payment as a business expense. Lease payments also typically reduce the tax burden by deferring sales takes throughout the term of the lease.
Lease Types
Leases are offered in various forms. The specifics of a lease usually depend on the distributer or manufacture of the leased equipment. A capital lease, for example offers the lessee legal ownership of the equipment for the duration of the lease term. In contrast, the lessor retains ownership while in the lessee’s possession in the “operating lease” which is quite a popular arrangement.
The fair market value of the lease is included in other lease variations, allowing for a purchase option and low monthly options. At the end of the term, the lessee purchase the gear for one dollar in the popular one dollar buy out deal. Another common option is a 10% purchase option that delivers a compromise between a buyout option and low monthly payments.
Other Lease Considerations
Ensure your lease has provision for repair and maintenance in addition to a provision for “normal use” when negotiating a fitness equipment to hire deal. Over the term of the lease, this should provide for every-day wear and tear. A clause for an unexpected early termination of the lease should also be negotiated, whereby the equipment is returned to the lessor earlier than agreed. Where technology and equipment changes are anticipated, a “trade up” provision should be included that allows the leasee to benefit from progressive equipment upgrades.