London, England, United Kingdom (AHN) – A price comparison site advised small business owners to lease instead of buy new cars to cut costs. But the advice is primarily for those who trade in their older models for new units every four or five years.

According to FinanceAcar.co.uk’s comparison, it would cost $210 (140 pounds) a month less to lease a BMW 3-Series on a four-year term compared to purchase a Ford compact at a 9.9 percent loan rate over four years.

The website pointed out business owners avoid paying value added tax on leased cars used only for work, while vehicles that are also used for personal trips get only a 50 percent cut in their VAT.

Mark Peatey, co-founder of FinanceAcar, stressed leasing is not for everyone. It would only work for those who change their car every four or five years, but buying a car is still the better option for those who want to drive the same unit for 10 to 15 years.

The website added it is impossible to pinpoint a finance option as better than others because the better choice is dependent on the circumstances of each case and type of leave available.

About two million cars are sold yearly in the U.S., 50 percent of these are purchased by individuals, 40 percent by fleet operators and 10 percent by businesses.

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Business financing is what most medium and small entrepreneurs are concerned about. The reason for this is the fact that these types of businesses are important in the new world of globalized commerce. Competition is increasing and banks are more reluctant to give the so much needed business financing.

Here we present you a set of options if you are looking for commercial financing.

The most common route taken by new entrepreneurs is to create a budget for equipment and the first investment and request business financing through commercial loans.

Industrial companies depend highly on the equipment they use. When commercial loans are not an option, leasing can be a good source for business financing. A leasing company will let you rent the equipment you will need for production and then bill you. You decide the terms through a contract that may or may not establish a purchase option at the end. The user is not entitled to the ownership of the equipment if the contract does not mention it.

Leasing is popularly used by companies that have vehicles and equipment because the leaser often provides maintenance.

The institutions that provide business financing will have a set of criteria that companies must match in order to qualify.

One factor funders will consider is the amount you are requesting and what the impact of the investment. Generally, banks will not give you all of the money you request. It will be up to the owner to finance up to a 30 percent. Leasing companies work differently. They will give you 100% of what you request the first time.

The prices of leasing have dropped due to the changes in the market. The prices are now more competitive because the offer has risen. Leasing companies when linked to banks give affordable prices.

The use of the equipment is the determining factor in choosing the mode of business financing. When the production process is stable, with good visibility on the duration and rate of utilization of equipment, commercial loans are often pertinent. However, once the investment decision is a gamble on the success industrial or commercial, leasing will be preferred. The leader keeps the possibility of separating equipment that has become unnecessary and recalculates a portion of the fixed costs.

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Be sure to View Pro-BargainHunter.com and http://IMMFinancial.com for more information

photo credit: Olando7