Cash-Related Benefits
Leasing is often the best use of cash and results in the highest return on investment. Leasing offers several cash-related benefits:
- Conserves cash and maintains liquidity
- Preserves lines of credit
- Provides a hedge against inflation
- Fits easily into budgets
- Lowers total cost of ownership
Protection Against Obsolescence
Leasing allows for equipment upgrades while cash purchases do not. Leasing also maintains competitive edge with the ability to use the latest technology.
Flexibility
- Leasing makes it easy for customers to add on as their needs grow.
- Leasing offers options such as equipment swaps, lease rollovers and coterminous upgrades to match equipment capacity to changing requirements.
- If equipment is owned, issues such as capital acquisition processes, market value versus book value, and access to secondary markets for disposal make it much more difficult to be responsive to a changing business climate.
- Leasing provides for flexible terms.
Tax Benefits
Lease payments are fully deductible operating expenses for tax purposes, so the actual cost of the lease is only a fraction of the payment. Customers may also be able to avoid the Alternative Minimum Tax which can result from owning rather than leasing equipment.