Benefits of Leasing:
- Leasing preserves capital; improves cash flow.
- Leasing is very flexible.
- Leasing protects bank lines of credit.
- Leasing reduces worries over obsolescence.
Leasing improves your businesses cash flow. It allows your company to acquire needed equipment without a large cash outlay. The lease may require the first and last payments in advance. There is no large down payment required.
Payments can be customized to meet an individual company’s needs. For example a company with a very seasonal sales cycle may benefit from a lease that allows for no monthly payments during the slow time of the year. Another example is a lease that delays monthly payments to allow the equipment to be put into service and to begin producing a pay off. There are other custom options available. Please, don’t hesitate to ask us about them. Our job is to find the best solution for your particular needs.
Leasing enables your business to retain and use your bank line of credit for other purposes, such as financing inventory and accounts receivable. Rather than tying cash up in equipment, your company might benefit by being able to use its cash for day to day operations or for expansion.
Although none of us knows what the future may hold, leasing allows a company to adjust to changing circumstances. Equipment may be upgraded or additional equipment of other types may be added with little difficulty.
- Leasing may provide tax advantages.
Depending on the type of lease you choose there can be significant tax advantages to leasing. These types of leases may allow you to reduce your taxable business income by deducting 100% of the lease payments as direct operating expenses, as opposed to depreciating the equipment slowly over time. (Ask your accountant or tax professional for details.)
