Generally, a business can lease equipment more easily than traditional bank financing. Many companies also find it no longer makes sense to invest capital in assets that depreciate quickly in value.
A lease finance option gives the Lessee the ultimate in choices and flexibility. Management and Purchasing Professionals are poised to take advantage of whatever option allows them to stay efficient, compliant and competitive.
Buy or Lease?
Why Lease?
- Convenience: A lease is a convenient source of additional capital to enable growing companies to quickly and easily replace equipment or to expand.
- Easy Budgeting: Leasing allows easier budgeting and many firms can fiscally function more effectively when they have a fixed monthly payment, an option that leasing allows.
- Preservation of Credit Lines: Leasing allows customers to maintain existing credit lines with suppliers and banks. Cash purchases not only deplete cash reserves that business may need for operations; it can have a negative impact on the balance sheet.
- Tax Advantages: Leasing may create tax advantages and address equipment obsolescence. If properly structured, the lessee can expense the payments over a shorter term than a cash purchase. Usually, this term will coincide with the useful life of the equipment. These advantages should be reviewed and confirmed by your accountant.