Eight Good Reasons why Leasing might be better:

A Lease Conserves Capital

Leasing enables you to utilize your capital for optimum return. While some operations require computers, bookkeeping systems or new phone systems to ensure efficiency and competitiveness others may need CNC operating machinery or other industrial equipment. Acquisition of these pieces of equipment via leasing preserves cash that can be used for raw materials, work in progress, inventory, advertising as well as productive items, or cash that may avert tremendous hardships if some unexpected crisis should arise.

A Lease Protects Established Lines Of Credit

Leasing provides 100% financing and avoids the necessity of pledging existing assets such as inventory or receivables for security. Leasing can in fact elevate or improve your credit rating.

A Lease Provides Stability

A fixed term lease is not subject to cancellation or recall like bank borrowings. Once a transaction is finalized, the cost and the monthly cash requirements are fixed and not affected by changing general rates. This is particularly meaningful in times of fluctuating rates and potential instability.

Leasing Provides Alternative Financing

Companies often experience cash restrictions and in such cases, a lease provides the company with a means to deal with this problem. It bypasses restrictive covenants while obtaining needed equipment. A lease can be tailored to meet most budget requirements and accommodate financial constraints.

A Lease Provides A Hedge Against Inflation

A lease payment is a fixed payment. As inflation or interest rates increase the lease payment is constant and stable. In fact, if inflation persists you will actually be paying for today's equipment with tomorrow's less valuable dollar.

A Lease Offers Tax Benefits

A lease payment is fully deductible as a business expense. Often this will provide a faster write off than the capital cost allowance via ownership. This will generally improve your cash flow and results in leasing being less expensive than ownership.

Leasing Facilitates Budgeting

Corporate, divisional or departmental budgets can easily be determined, as can operating projections, when equipment or operating costs are fixed. It is easier to handle and approve small monthly costs than a large capital expenditure. Through leasing you will have your equipment immediately without waiting for budgeting delays or head office approvals.

A Lease Helps Manage Obsolescence

Advances in technology are being made so quickly that a machine new today is obsolete in a few years. A lease program of planned equipment replacement enables you to obtain maximum efficiency from your equipment without the up front purchase costs. Profits are generated using the equipment over the term of the lease.

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