Benefits of Leasing Equipment
Leasing is Flexible. Companies have different needs, different cash flow patterns, different and sometimes irregular streams of income. For example, startup companies typically are characterized by little cash and limited debt lines. Mature companies might have other needs - to keep debt lines free, to comply with debt covenants, and to avoid committing to equipment that may quickly become obsolete. Therefore, your business conditions - cash flow, specific equipment needs, and tax situation may help define the terms of your lease. Moreover, a lease provides the use of equipment for specific periods of time at fixed rental payments. Therefore, leasing allows you to be more flexible in the management of your equipment.
Leasing is Cost-Effective. Equipment is costly and some of the costs are unexpected. When you lease, your risk of getting caught with obsolete equipment is lower because you can upgrade or add equipment to best meet your needs. Further, your equipment needs can change over time due to changes to your company, such as diversification. Leasing allows you to stay on the cutting edge of technology.
Leasing Has Tax Advantages. Rather than deal with depreciation schedules and Alternative Minimum Tax (AMT) problems, you, the lessee, simply make the lease payment and deduct it as a business expense.
Leasing Helps Conserve Your Operating Capital. Leasing keeps your lines of credit open. You don't tie up your cash in equity. Also, you avoid costly down payments. With other advantages such as off-balance sheet financing, leasing helps you better manage your balance sheet.
Why You Should Lease
Primary advantages of leasing Equipment:
- Tying up thousands of dollars to purchase equipment could cost more than you think. The value of business equipment lies in using it--not owning it!
- 100% tax deductible*
- Lease payments are usually a pre-tax operating expense and therefore are fully deductible (consult your CPA).
- 100% Financing **
- No large down payment is required to start a lease. Leasing puts the equipment to work for you immediately, at minimal up-front cost. Software, delivery, installation, freight, and sales tax can be included.
- Preserves capital and credit lines
- Leasing keeps your capital sources available to meet needed short-term requirements. Conserve your cash and credit lines for important long-range plans such as expansion, improvements, and growth.
- Minimized risk of obsolescence
- When new generation of equipment becomes available, you will have the flexibility to upgrade or add-on. You are not faced with the burden of owning old or obsolete equipment.
- Makes more equipment available
- Since the monthly lease payment is a small portion of the total cost of the equipment, leasing allows you to obtain a greater amount of equipment for your business.
- Your choice of lease terms
- Traditional 12, 24, 36, up to 84 month programs, or...
- Specially designed lease programs
- We can tailor payments to match your seasonal cash flow.
- Allow for lower first-year payments so that you can have state-of-the-art equipment now without first-year cash flow problems.
- Flexible end-of-lease options
- You may opt to trade-up to new equipment, continue to rent the equipment, return equipment to lessor, or exercise the purchase option and own the equipment.
* Consult a tax advisor regarding deductibility
** All loans are subject to credit approval