Benefits of Leasing

Why Lease

The Equipment Leasing and Finance Foundation estimates that by 2020 total investment in equipment and software is expected to reach $1.8 trillion, of which $1.24 trillion is projected to be financed. It is further estimated that of that 68% of equipment that will be financed, 39% will be leased, 16% will be secured loans and 13% will be lines of credit.

Lease financing provides businesses the ability to:

CONSERVE CASH

Businesses benefit by conserving cash for working capital purposes. Having ample available cash on hand is an important key factor for any business.

CONSERVE LINES OF CREDIT

Banks are an important ally for business, and conserving available lines of credit for specific needs is advisable for any successful company.

MINIMIZE UPFRONT COSTS

Equipment acquisition is a vital component to keep a company current, but hefty upfront costs can make it difficult to obtain. Equipment leases require minimal upfront costs—typically only one or two monthly payments. A bank loan can require 10%-25% upfront.

MAINTAIN STATE-OF-THE-ART EQUIPMENT

Leasing allows businesses to stay up to date with state of the art equipment at a low monthly cost, and to correspond the lease term with the general life expectancy of the equipment.

BENEFIT FROM TAX ADVANTAGES

Leases fall into one of two categories: capital or operating. Each follows a different accounting procedure and each provides specific advantages to a company’s financial statement. Check with your accountant to see which program best suits the needs of your company.

Disclaimer: Your specific situation should be discussed with your CPA and tax adviser before making any tax decisions.