WHY LEASE

Why should I lease business equipment?

Leasing equipment is synonymous with “use of an asset.” You don’t pay your employees a salary in advance, you pay them as they contribute. It should be no different with a contributing asset like business equipment. Leasing enables you to pay as you use the equipment, not before.



Leasing Offer’s numerous advantages over other financing methods;

 

100% Financing – Including Soft Costs…

In addition to financing 100% of the equipment, you may be able to include in the lease "soft" costs such as sales tax, shipping, software, training, maintenance and installation. This leaves you with more money to invest in revenue-generating activities.

 

Potential Tax Advantages...

Unlike borrowed funds, certain lease payments can be treated as an operating expense (tax deductible overhead expense). Therefore the equipment does not have to be depreciated over a long term, resulting in a rapid write off. Monthly lease payments are paid with your pre-tax income instead of your after-tax profits. Leasing may also help your business avoid the Alternative Minimum Tax (AMT).

 

Reduced Paperwork and Approval Time…

Leasing is simple and easy. Leasing can allow you to respond quickly to new opportunities with minimal documentation and red tape.

 

Easier Financing Than Bank Loans…

Avoid typical “bank requirements” such as compensating balances, large down payments, client list reviews, cash flow projections and the like.

 

Credit Preservation...

Since leasing represents an entirely separate source of credit, it enables you to preserve your established lines of credit with banks and other financial institutions. Banks are great for short term needs and should be kept open and available for opportunities, inventory, marketing, personnel or emergencies. This not only enhances your borrowing capacity, but may improve your balance sheet by reducing long-term debt.

 

Avoid Bank Restrictions…

Leases don’t require blanket liens, restrictive covenants, rate escalator clauses, “call anytime” provisions, compensating balance requirements or any of those other encumbrances often required by traditional lenders.

 

Minimize Obsolescence...

Leasing gets more mileage out of your money simply because your monthly lease payment is a very small portion of the total cost of the equipment. So, rather than trying to "make do" with obsolete equipment (due to heavy capital investment in its ownership) leasing gives you the freedom to react quickly and cost-efficiently to changes in the marketplace

 

Improved Balance sheet Ratios

Because an operating lease is not considered a long-term debt or liability, it does not appear as debt on your financial statement, thus improving the balance sheet and making you more attractive to traditional lenders when you need them.

 

Flexible End of Lease Options

At the end of the lease term you may choose to purchase your equipment, upgrade it, or continue to lease it. Or if you’re done with the equipment, return it


*Please check with your tax consultant to determine the exact benefits of commercial leasing.