A Financial Services Company
Leasing is the modern tool used by business and industry to gain the use of equipment and furnishings. This method is employed more and more frequently because it eliminates large cash outlays required for outright purchases and allows these funds to be used for other investment purposes.
Ownership of equipment alone will not produce revenue. It is the USE of equipment which is productive. When viewed from this perspective, leasing is frequently less expensive.
1. Conservation of Capital
Cash remains untouched and available for other profitable purposes.
2. Tax Savings and Improved Cash Flow
The full cost of leasing can often be treated as an expense deduction for income tax purposes and may result in a larger tax deduction than if you were claiming interest and depreciation expenses. This can mean substantial tax savings and improved cash flow.
3. Better Terms
Lease payments usually can be extended at fixed rates over a longer period of time than conventional bank financing... and without large down payments.
4. Simplified Recordkeeping
One monthly rental covers the entire cost of the equipment. No depreciation or amortization records need be kept.
5. Easier Allocation of Cost
Cost of individual equipment or systems can be better analyzed, controlled, and reduced because of direct allocation. No hidden costs.
6. Leaves Bank Lines Untouched
Normally, a lender will not reduce a line of credit when equipment is leased. However, when the equipment is financed through a loan, it consumes available credit.
7. Cleaner Balance Sheet
Lease payments may be entered as footnote items on a balance sheet and may not increase your liabilities as a loan does. This is important to obtain additional credit.
8. Helps Overcome Budget Limits
Since a lease is generally treated as an expense rather than as a capital expenditure, room can often be created for monthly rentals.
9. More Liberal Credit Criteria
In many cases, a lease can be completed when conventional bank or other financing may not be possible.
Convenience is a surprisingly important part of leasing's appeal-both from the equipment vendor and end-user standpoints. What businessman needs the additional hassle of "scratching up" long-term capital financing when DLFC is ready, willing, and able to do it for him?
DID YOU KNOW?
Industrial Robotic Machine