Leasing 101: The Advantages of Leasing Equipment
You can lease almost any kind of equipment. Machine tools… construction equipment… copiers… computers… medical/dental equipment… from single items to an entire office or plant. All are available through our leasing programs.
You choose the equipment you want. You make the arrangements as to price and specifications with the supplier you have selected. You retain all manufacturer’s warranties and guarantees
You get a longer term, smaller payments. Typical lease terms are two to five years… usually somewhat less than the useful life of the equipment. Nearly always this term is longer than a normal loan period from a borrowing source, resulting in lower monthly payments.
You enjoy virtually 100% financing. Practically any other financing demands a substantial down payment, deposit or other compensating bank balance. By leasing you can quickly acquire use of the equipment you want without major cash outlay. You normally pay only the first and last lease payment, sometimes only the first.
You can get a hedge against obsolescence. With today’s rapidly moving technology, some equipment can become obsolete relatively quickly. Leasing frequently enables you to acquire the new equipment you need without having to keep costly equipment working years beyond its profitable time.
You keep both cash and machines generating profits. Cash and machines are working assets. With no cash tied up in the equipment, you have both assets working for you. Particularly important under conditions of high-priced money, inflation and cost squeezes.
You can deal with budget restrictions. Budget restrictions preventing purchase of equipment or acquisition of fixed assets still may often permit a workable lease arrangement. This may be true of branch operations of larger companies, for hospitals, non-profit organizations, and municipalities.
You gain possible tax advantages. Lease payments are often treated as fully deductible expenses. This may mean a more rapid write off to you. Because the lease term is generally shorter than the depreciable life, payments can be expensed in a shorter duration.
You can build your available credit. With leasing, you can get the equipment you need now without disturbing your present bank credit lines. Preserving your bank lines for other possible uses means the same thing to you as expanding available credit. The lease does not normally show up on your balance sheet or credit report as a debt.
You get great flexibility in lease plans. Lease payments can be arranged to match your cash flow pattern, to match seasonal business, to match earnings generated by the equipment. Upon expiration of your lease, arrangements can be made for renewal, purchase, or return of equipment. We will structure a lease plan to fit your situation and specific requirements.
You may find leasing the least expensive way to get equipment. After examining the possibilities involved in cash purchase, a bank loan, or installment purchase, and after considering the advantages you can derive from the use of freed-up capital, you often find leasing costs you less than other methods of acquiring the equipment you need.