The Possible Benefits of Leasing
the Customers Point of View
Conserve Working Capital - Capital
may be put to more profitable uses such as inventory discounts
or additional production capability.
Enjoy Tax Advantages - Properly structured lease
payments may be tax deductible business expenses paid
from pre-tax earnings instead of from-past profits.
Conserve Cash Flow - Iindividual lease payments
are usually less than those of conventional loans because
the terms are extended for longer periods of time and
thus reduce demands upon cash flow. Leases can normally
be structured so that the equipment can pay for itself.
Utilize Flexible Payments - Lease payments can
be structured to follow a seasonal business pattern, can
conincide with earnings made from the equipment's use,
or to be made comparible to various methods of depreciation
so you have maximum financial manueverability. Large inital
down payments are usually avoided. The customer chooses
the payment plan best suited for his needs.
More Accurately Forecast Expenses Against Income
- Leased equipment costs are predicatable and can be measured
against income the new equipment is expected to produce.
It usually produces a profit instead of increasing operational
Replace Or Modernize Equipment When
Needed - Leased equipment is expensed over several
years and is more easily replaced before obsolescence
and physical deterioration take place, so devaluation
Have A Hedge Against Inflation - Lease payments
are based on the dollar's current value. These payments
remain constant regardless of the future effect inflation
has on currency value. Based on actual inflation percentages
over the past 10 years, this may be your major reason
for leasing. In effect, you pay each payment with cheaper
and cheaper dollars compared to the dollar's current