Equipment leasing helps companies increase profitability and leverage capital. Companies gain a competitive advantage in uncertain markets. Equipment leasing is a way for companies to control costs, leverage capital and ensure long term survival. Leasing is a strategic financing option that companies utilize to leverage capital, increase cash flow, take advantage of tax benefits and hedge against risks.
Equipment leasing offers companies the opportunity to procure equipment at a fixed rate for a fixed amount of time without having to purchase it outright. By leasing a company is relieved of the uncertainties and risk associated with ownership. It has always be a strategic solution for businesses and with economic uncertainty leasing can help companies ride out any storms.
Advantages:
1) 100% financing with very little money down.
2) Tax benefit for companies can deduct lease payments from corporate income for it is considered a tax deductible overhead expense.
3) An operating lease is not considered long term debt or a liability so it does not appear as debt on corporate financial statements making company look more attractive to traditional lenders.
4) Companies can upgrade or add equipment to meet their changing needs at any point during the lease.
5) A lease provides the use of equipment for specific periods of time at fixed payments. It assumes and manages the risk of equipment ownership.
6) A lease can help a company acquire the latest technology and control cash flow.
7) There are a variety of lease options available allowing companies to customer tailor a program to fit month to month or year to year cash flow needs.
8) Leasing allows companies to respond quickly to new opportunities and technology.
In short Leasing can give companies the ability to leverage their capital, increase cash flow and maintain more funds for business expenditures.
At the end of a lease the company usually has the option to purchase the equipment for its remaining value. By leasing the end user transfer all risk of obsolescence to the lessors as there is no obligation to own equipment at end of lease.
Companies rely on equipment every day to operate and grow their business.
But the value of that equipment comes from using it not owning it. By leasing companies transfer the uncertainties and risk of equipment ownership to the lessor which allows them to concentrate on using that equipment as a productive part of their business.
