Leasing offers tremendous benefits compared with traditional financing, making it an attractive preference for many businesses and organizations. In fact, it is estimated that nearly 8 out of 10 companies in the United States lease most, if not all, of their capital equipment. Here’s why:
Helps Improve Cash Flow
Leasing allows for immediate placement of equipment and prompt funding upon delivery of the equipment. This enables your equipment to instantly become revenue generating.
Helps Conserve Working Capital
By leasing your equipment, you can stop working for your capital and allow it to work for you. Lease agreements allow equipment to more than pay for itself through usage while leaving working capital available for inventory investments, marketing, growth and expansion, or even emergencies.
Helps Avoid Technological Obsolescence
At the end of the lease term, the lessee is not ‘stuck’ with the equipment if it is no longer beneficial to them. Leasing provides many options, including trade-ins, upgrades, and add-ons.
Helps Preserve Existing Lines of Credit
Leasing allows existing credit lines to remain intact to fuel growth or meet expenses.
Helps With "Soft Costs"
You may be able to include expenses associated with equipment use, such as shipping, installation, and software into the lease agreement. This allows for 100% financing of your equipment cost.
Helps Acheive Potential Tax Benefits
Lease payments are often fully deductible as an operating expense, helping to avoid the Alternative Minimum Tax (AMT) Liability. (Contact your tax advisor for details).
Helps Create and Maintain Healthy Customer Relationships
Leasing allows you to be a ‘one-stop shop’ for your customer. You can offer equipment, service, and financing at the point of sale, eliminating the need to send your customer elsewhere.