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Leasing allows you to purchase the equipment you want without imposing upon your company's cash flow, and is paid for by the profit and operating efficiencies the new equipment generates. Also, lease payments are made from future earnings, providing present value savings, as today's dollars are worth more now to your company then future dollars. |
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Through leasing's extended terms, payment amounts can be substantially lower then they would be if the equipment was purchased with borrowed funds. Payments may be arranged to occur at a variety of different frequencies, from monthly to quarterly to annually, etc. Different payment amounts can be designed to occur within the same lease, including seasonal and step payments. In short, leasing provides you with far greater financial flexibility then any other form of equipment acquisition. The possibilities are vitually unlimited. |
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A lease is not a loan. While a loan reduces your credit availability, leasing expands that availability, providing new credit sources.
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Unlike loans, leasing usually requires no down- payments, and eliminates the need for compensating balances.
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To purchase equipment with borrowed funds would increase your liabilities, significantly affecting your leverage ratio. Leasing increases your liquidity and provides off-balance-sheet financing.
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Rather then purchasing equipment with cash lease it. Through leasing, you conserve working capitol that can be used more profitably for your short-term business needs.
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For some companies, capital expenditures must often be forecast and planned for months or years in advance. Acquisition of the very same equipment through leasing often avoids levels of authorization. |
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Leasing lets you regularly upgrade your equipment to a state-of-the-art level, eliminating the inefficiencies of owning out-dated equipment.
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Equity financing forces you to solicit investment in your company by outside sources. Leasing circumvents this, maintaining present ownership.
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Unlike loan payments, lease payments may be fully tax deductible as an operational expense.
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