|
January 6, 2009
|
- Leasing normally provides 100% financing and conserves working capital
- Allows for payment of the equipment from earnings; payments are deducted as operating expenses
- Provides flexibility in the amounts financed, payment structures, and other terms
- Avoids use of short-term bank lines, conserving borrowing capital for financing inventory, accounts receivable, personnel, and other operating expenses
- Provides a new source of funds, often enlarging the pool of capital available to your company; improves cash flow
- Requires no down payment; there is a small initial cash outlay
- Provides lower cost of financing on larger equipment purchases, when leaser can "leverage" the tax benefits
- Convenience - an equipment lease is generally easier to obtain than an equipment loan
- Avoids working capital, net worth dividend and other restrictions common to other types of intermediate and long-term financing; simplifies cost accounting
- These are capital leases typically with a $1 buyout at the end.
- Most leases run 3, 4 or 5 years.
|
|
