Commercial Leasing

Why should a company lease?
Leasing can provide a company with many tax benefits and other financial advantages to flexibility and convenience.

Leasing allows the company to acquire the equipment needed without touching working capital or line of credit, so the company remains financially strong and liquid.

While the purchase of equipment directly affects the balance sheet, leasing can turn equipment into an operating expense rather that a capital liability. Leasing can also improve reported earnings by avoiding the depreciation expense involved with capitalized equipment, and report a higher return on assets. This will present a strong, healthy picture to shareholders and lenders.

Furthermore, while a financial institution may require a 10 to 20% down payment on an equipment purchase, leasing requires no down payment. The costs of acquiring equipment (including delivery, installation and sales tax) can be built into the lease payments and expensed over the life of the lease, rather than being paid up front, before the equipment is even working for the company. Future purchases and upgrades can be leased, as well.

Leasing can also improve the company's cash flow position. Payment schedules can be designed to coincide with the company's seasonal activity, projected business growth or other normal business cycles...a flexibility that other financing methods don't offer.

Leasing can be an excellent hedge against obsolescence. Because much of today's business equipment is based upon technology that is changing very rapidly, companies have discovered leasing eliminates the potential problem of owning equipment that may become useless earlier than expected. And, of course, all guarantees and warranties offered by the manufacturers apply to leased equipment as well. At the end of the term of the lease, the company has the advantage of choosing what happens to the equipment. The company can decide to purchase it, extend the lease to an upgraded model or simply return it.

One of the most important benefits of leasing is....lower cost! There are no origination fees and other set-up charges with leasing that are often required for an equipment loan. To learn more about this exciting offer contact us today!

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