Advantages of Leasing

Leasing is one of the fastest growing means for businesses to finance equipment. Over 80% of all U.S. companies lease all or some of their equipment. Any type of organization can lease, including proprietorships, partnerships, corporations, government agencies, religious organizations and non-profit organizations.

Some of the many benefits include:

100% Financing – Unlike conventional borrowing, leasing allows you to finance the full amount of the equipment, including, at times, the service, shipping, installation, sales tax and maintenance costs.

Convenient – Leasing offers a complete solution. The process is faster, simpler, and less costly than other financing alternatives.

Flexible – Lease terms can range from 12 to 240 months, depending on the equipment and the type of lease. At lease end, you can purchase the equipment (for $1 or fair market value, depending on the type of lease), upgrade to new equipment, continue the lease, or return the equipment.  Leasing is also flexible -- you can tailor your payment terms to meet cash flow or budgetary requirements with a variety of options such as:

  • "Step-up" leases - allowing you to start with low payments that increase over time.
  • "Skip" leases - restricting payments to given months of the year so you can plan ahead.
  • "Deferred payment" leases - allowing a grace period before your first payment is due.
  • "Master" leases - offering a way to add more equipment to your existing lease without resigning every document.

Tax Advantages – Monthly payments on operating leases are typically viewed as operating expenses, offering significant tax benefits. You should consult with your financial advisor to determine what the best arrangement is for your company.

Preserve Working Capital – With conventional borrowing, more upfront money plus a significant down payment may be required. Leasing generally requires only one or two payments upfront.

Protects Against Obsolescence – It allows you to replace or upgrade equipment as your needs change, your business grows, and you strive to maintain a competitive edge.

Provides Fixed Payment You will know your payment over the lease term, allowing for more accurate forecasting and easier budgeting and planning for monthly expenses.

Hedge Against Inflation – When you lease equipment, you pay for it as you use it. When you purchase, you pay in current dollars for future use of equipment. So, if inflation continues, leasing can help provide protection against future decreases in dollar value.

Control Your Business – Equipment is used as the collateral, thus allowing your company to avoid blanket liens and financial restrictions that banks and other lending institutions might require.

 

 
© Equipment Capital Corp.