Leasing is one of the fastest-growing ways of financing equipment in business today. A recent Gallup survey revealed that over 80% of U.S. Businesses lease
a portion of their equipment. In fact, the ELA, (Equipment Leasing Association) forecasts that of the $850 billion businesses will spend on equipment in 2006,
approximately $229 billion of that (27%) will be acquired through leasing. The list of companies using leasing ranges from the Fortune 500 to the family store.
A growing business is apt to face the dilemma of limited cash flow and the need to add equipment. Leasing can put that equipment to work for you without a major
capital investment and with real cash flow and tax advantages. Below are some of the major benefits of Equipment Leasing.
Your monthly lease payment will usually be lower than the payment required by other methods of financing. You have more flexibility by structuring a
particular buyout, lengthening the term, etc. You can actually afford more equipment with leasing.
Where other types of financing require a hefty down payment, leasing is 100% financing. Most lease agreements require an advance of only one to two
month's payments. Leasing puts the equipment to work for you immediately, at a minimal up-front cost.
Acquire Equipment Without Tying Up Capital
Leasing and financing offer less red tape than with bank financing. You can also complete the process much quicker (generally a one page application)
which is important if you need your equipment by a specific date. "Your Lease Connection" offers, free of charge, a dedicated Account manager who will
coordinate the details with your equipment vendor to make sure your lease is completed in the timeframe needed.
Convenience & Flexibility
Purchase the equipment and technology you need today while spreading your payments affordably across time. This allows you to reserve your capital for other
day-to-day expenses. Because a lease is not considered a long-term debt or liability, it does not appear as debt on your financial statement (balance sheet),
making you more attractive to traditional lenders when you need them.
The latest and best equipment lets you do the job faster, more efficiently and cheaper than the competition. Leasing gives you the advantage of the latest
available technology at a more affordable cost.
Maintain a Competitive Edge
"The newest innovation" doesn't stay new. Leasing gives you today's best technology and then lets you upgrade when the equipment has outlived its advantage.
You can eliminate the hassle of selling equipment at a depreciated value.
Leasing gives you more than just the equipment. It also can cover items like sales tax, the cost of delivery and installation. Your lease includes everything
it takes to actually put the equipment to work for you.
Take Care of the "Hidden or Soft Costs"
Purchases are made with after-tax dollars. Your lease payments are usually considered a pre-tax business expense and as such may reduce your taxes.
Lease payments are little more than a line-item in your monthly cost of operations - a minimal bookkeeping effort that frees you from time-consuming
Remember 1980, when interest rates skyrocketed from 9% to 21.5% in a single year? Unlike bank lines of credit, with variable rates, lease payments are
fixed - no matter what happens to the market tomorrow.
Guard Against Market Conditions with a Fixed Payment