Benefits of Leasing
- Leasing is a proven way of acquiring productive equipment for your business. 8 out of 10 companies in the United States choose leasing as a preferred method of equipment acquisition due to its distinct advantages.
- Leasing protects a company from technological change, because it helps your company avoid one of the key risks of ownership, that new technology will become obsolete within a few years.
- Operating profits come from the use of equipment, not ownership of it. Leasing allows payments to be made from the revenues generated by leased equipment.
- Leasing makes equipment more affordable than other financing methods because it offers 100% financing – which can include your sales, shipping and installation charges.
- Leasing can be structured to offer “off balance sheet” financing - which means the debt and corresponding asset is kept off the balance sheet. Therefore, borrowing capacity is increased, debt covenants are circumvented and the company appears healthier. Also, the Lessee’s financial ratios are enhanced.
- Preservation of existing bank or working capital credit lines.
- Leasing allows you to conserve cash that can be invested in your business, instead of in assets that depreciate.
- Lease payments are fixed for the entire life of the lease, which simplifies the budget process.
- Your fixed lease payments are not impacted by future interest rate fluctuations.
- Lease payments can be structured to match the cash flow needs of your business.
- You may also lease software and other costs such as installation, freight and handling charges.
- Leasing overcomes budget limitation. Leasing lets you get the equipment you need free of budget ceilings. Low monthly payments let you hold expenditures within budget limits.
- Lease payments may be fully deductible for tax purposes. Therefore leasing allows you to pay for the equipment you need today with pretax dollars.
- Leasing costs remain the same over the life of the lease agreement, no matter how much prices and interest rates rise. A lease lets you use the extended term to pay for today’s needs with tomorrow’s dollars – so it helps you fight inflation.