Benefits of Leasing

As businesses grow, they need to be poised to seize new opportunities.  But which financing option makes most sense for your customer – a lease or a loan?  Understanding the benefits of leasing will help you guide your customer to ensure the right choice is made. 

  1. Conserving Capital

    Direct purchase of equipment can be very costly, resulting in downward pressure on oft needed working capital for your customer’s business. With an equipment lease program, which is designed around your customer’s specific equipment needs and budget, he or she can make affordable monthly payments over time. This allows customers to save money for business expenses, expansion and more.

  2. Fixed Monthly Payments

    When equipment is leased, a monthly payment is generated that hopefully fits within your customer’s budget. There are no surprise fluctuations in payments because of interest rate changes, allowing a business to plan accordingly.

  3. Tax Benefits

    Equipment leasing usually offers meaningful tax benefits. The IRS allows for lease payments to be fully deductible if the business uses the leased equipment.

  4. Equipment Obsolescence

    Leasing equipment gives your customer the freedom to purchase new equipment at the end of the lease, avoiding the risk that the equipment may become obsolete. Being able to make upgrades to newer equipment when your customer’s lease is up may grant a competitive edge. When you customer buys equipment, he or she is stuck with it unless it’s sold.

  5. Equipment Disposal

    Retiring old equipment can be a hassle, particularly when environmental and other regulations for its disposal come into play. When your customer chooses a lease, this may not be an issue. He or she has the option to return the equipment at the end of the term, leaving proper disposal in the hands of the lessor.

  6. Off-balance sheet Financing

    Leased assets are expensed when the lease is an operating lease. Such assets do not appear on the balance sheet, which can improve financial ratios.