When first starting a business, cold hard cash is extremely important. Even if you aren’t paying yourself a wage, the daily costs of running a start-up soon mount up prior to finding sufficient clients or orders to break even. Therefore, unless your business requires transport in order to provide its services, it can be difficult to justify releasing capital to purchase a new vehicle. However, travelling to see potential clients, suppliers and attend events via public transport can often be costly and time consuming. Here are 5 reasons why short-term car leasing could be the perfect solution.
No Money Up Front
The greatest benefits of short-term car leasing for start-ups are that there is usually little or no capital needed upfront for a deposit and you can also be safe in the knowledge that your leasing costs include emergency assistance, vehicle recovery, road tax and vehicle maintenance. Therefore, the only other costs you need to consider once you receive the vehicle are insurance and petrol.
It can also be beneficial for a start-up to make a regular monthly payment such as car leasing, as this demonstrates to lenders that your company is reliable and this can improve your credit score over time.
Cash flow in any organisation can be up and down, but this can be particularly precarious in a fledgling start-up. By short term leasing a car you can be safe in the knowledge that after 28 days that you have the ability to return the vehicle at any point should you need to make cash available for other priorities within the business.
No Asset Depreciation
It can be frustrating in both business and in your personal life that assets start depreciating immediately at the point of purchase. This is particularly galling with cars as they can drop in value by as much as 10% as soon as they have left the showroom and by up to 40% by the end of the first year of ownership. By leasing a car short term, you can avoid the ongoing irritation that a costly asset to the business is decreasing in value as every day passes!
As and When…
Short term car leases can be for as little as 28 days which allows you the flexibility to have access to a vehicle as and when you require it. Having a vehicle all year around can often be expensive and potentially problematic, especially if you live within a major city where parking is scarce. Having the option to lease a car only in times of need, such as push on business development or having a presence at an industry specific exhibition, can be extremely beneficial.
Fake It Until You Make It
‘Fake it until you make it’ is often quoted in business circles. What this basically means is you should act like a well-established business from the very beginning until you actually become a well-established business. The reasoning behind this is that by creating the notion that you a professional outfit which has been around the block a few times, clients and customers are much more likely to put their trust in you. Short term car leasing allows to have access to a vehicle which is much more expensive than you are likely to be able to purchase at the dawn of your start-up journey. This will allow you to create a much better first impression by turning up to a client meeting in a nice car rather than arriving in an old banger!