Equipment leasing is a financing option where a business can use machinery, vehicles, IT hardware, or other fixed assets for a specific period without purchasing them. The leasing company (lessor) retains ownership, while the business (lessee) pays rental fees for using the asset.
🧾 Types of Equipment Leasing:
| Type of Lease | Description |
| Operating Lease | Short-term lease; asset remains with lessor; lessee can upgrade/return |
| Financial Lease | Long-term lease; lessee covers asset cost + interest; often ends with ownership option |
| Sale and Leaseback | Business sells owned equipment to lessor and leases it back to unlock capital |
| Hire Purchase | Ownership is transferred to the lessee after all installments are paid |
💡 Key Features:
- No upfront capital investment
- Preserves working capital
- Customizable tenure: 1–7 years
- Tax benefits: Lease rentals may be tax deductible
- Option to upgrade equipmentin operating lease
🏦 Top Leasing Companies in India:
- Srei Equipment Finance
- Cholamandalam Investment & Finance
- Tata Capital
- L&T Finance
- HDB Financial Services
- Magma Fincorp
- Global players: IBM Global Financing, HP Financial Services(for IT leasing)
📋 Eligibility Criteria:
- Businesses with operational history (typically 2+ years)
- Strong financials (based on turnover, profit, and credit score)
- Purpose of asset clearly defined (e.g., construction, manufacturing, logistics)
📑 Documents Required:
- KYC documents of company and promoters
- Audited financials (last 2–3 years)
- Bank statements
- GST returns
- Asset/vendor quotation or invoice
📈 Benefits of Equipment Leasing:
- No large capital expenditure
- Easy upgrades and replacements
- Helps manage asset obsolescence
- Predictable monthly costs
- May offer option to purchase the equipment at lease end