equipment-leasing

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What are the advantages of Equipment Leasing?

Leasing is the modern tool used by business and industry to gain the use of equipment and furnishings.

This method is employed more and more frequently because it eliminates large cash outlays required for outright purchases and allows these funds to be used for other investment purposes.

Ownership of equipment alone will not produce revenue. It is the use of equipment which is productive. When viewed from this perspective, leasing is frequently less expensive.

Some advantages of lease financing are:

Conservation of Capital

Cash remains untouched and available for other profitable purposes.

Tax Savings and Improved Cash Flow

The full cost of leasing can often be treated as an expense deduction for income tax purposes and may result in a larger tax deduction than if you were claiming a depreciation expense. This can mean substantial tax savings and improved cash flow.

Better Terms

Lease payments usually can be extended at fixed rates over a longer period of time than conventional bank financing, without the large down payments.

Simplified Recordkeeping

One monthly rental covers the entire cost of the equipment.

Easier Allocation of Cost

One monthly rental covers the entire cost of the equipment.

Leaves Bank Lines Untouched

Normally, a lender will not reduce a line of credit when equipment is leased. However, when the equipment is financed, it consumes available credit.

Cleaner Balance Sheet

Lease payments may be entered as footnote items on a balance sheet and may not increase your liabilities as a loan does. This is important to obtain additional credit.

Helps Overcome Budget Limits

Since a lease is generally treated as an expense rather than as a capital expenditure, room can often be created for monthly rentals.

More Liberal Credit Criteria

In many cases, a New Equipment Leasing lease can be completed when conventional bank or other financing may not be possible.

Convenience

Convenience is a surprisingly important part of leasing's appeal-both from the equipment vendor and end user standpoint. What business-person needs the additional hassle of "scratching-up" long term capital financing when New Equipment Leasing is ready, willing and able to do it for them?