Financial Benefits of Leasing
Leasing makes technology more affordable for any size company. For example, leasing can provide a more complete technology solution with lower payments and little to no up-front cash.
PRESERVES YOUR WORKING CAPITAL
Why use your available cash to purchase an asset that has limited life and depreciates in value?Instead, invest that money in an area of your business that will appreciate in value or generate revenue. Leasing allows you to pay for the use of an asset to help you grow your business. Through a lease, you only pay for the portion of the asset that you use, rather than purchasing the entire asset. Therefore you keep your cash on hand, making it easier for you to quickly capitalize on new business opportunities when they arise.
IMPROVES CASH FLOW
How can you improve your company's cash flow and at the same time acquire new technology equipment to help you grow your business?Leasing enables you to acquire the technology equipment your business needs without draining your cash flow. Why? Because with a typical lease you don't make a down payment; and your payment is a low, fixed payment for the term of the lease. This makes your cash flow more predictable than with a loan, which can be tied to a variable interest rate.
IMPROVES YOUR FINANCIAL RATIOS
Do you need new IT equipment, but don't want the added liability on your balance sheet?Certain types of leases can actually improve the financial ratios of a company. Leases structured as operating leases that pass Federal test FASB 13, provide off balance sheet financing. This means that neither the lease payments nor the assets are shown on your company's balance sheet, therefore, possibly improving your company's financial ratios.*
* Be sure to consult your financial auditor/advisor for specific recommendations.
PROVIDES TAX ADVANTAGES
Did you know that leasing can reduce your tax liability?
If you lease, you may be able to take a deduction for your lease payments by reporting them as regular operating expenses. And, if your company is subject to the alternative minimum tax, your lease payments do not increase the minimum tax liability because they are not considered a tax preference item.*
* Be sure to consult your financial auditor/advisor for specific recommendations.
SIMPLIFIES OPERATING BUDGET APPROVAL
Is it getting more and more difficult in your company to get operating budgets approved?Since operating leases are operating expenses in nature and are usually a much smaller expense than a purchase payment, they typically require approval at a much lower level within the organization (usually departmental vs. corporate). By acquiring technology equipment through an operating lease, you will generally simplify the budget approval process.
ALLOWS FOR ALTERNATIVE FINANCING
Does your company have a unique need such as seasonal or uneven cash flow challenges?Leasing allows you to have whatever structure and term your business requires. The built-in flexibility of leasing gives you the power to make the necessary choices to meet your unique needs. See Leasing Solutions for more information.
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