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Less impact
on cash flow.
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You can structure payments to parallel your
cash flows. Leasing can be great for seasonal or cyclical businesses that prefer
to schedule payments during peak cash flow periods.
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Reduced
paperwork and approval time.
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Most lease credit decisions
can be made within 24 hours. Transactions up to $100,000 require completion of
only a simple, one-page application.
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Conservation of capital
and credit.
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Your lines of credit and sources of capital
aren't tied up in equipment. Instead, they're available for opportunities such
as inventory, marketing, or personnel.
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Immediate use of
equipment.
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After signing your lease documents, you can
contact the vendor to schedule delivery. It's that easy.
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Project
basis use of equipment.
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By selecting a lease term that
closely matches the project's duration, leasing is a good way to acquire the latest
equipment without having to keep it when that project is complete. Then, enter
another lease on new equipment for the next project. This way you'll always be
able to maintain a competitive edge by using the most advanced equipment to serve
your clients.
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100% financing - including soft costs.
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In addition to financing 100% of the equipment, you can include
"soft" costs (up to 10% of the equipment cost) such as sales tax, shipping,
software, training, maintenance and installation into the lease.
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Protection
against obsolescence.
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High tech equipment is often obsolete
in two-to-four years. You can add upgrades and new equipment by modifying your
lease arrangement to keep your company on the leading edge. Plus, if you want
to acquire complementary equipment (e.g., adding voice mail to a phone system),
you can arrange for both equipment leases to end at the same time. This can prevent
staggered leases from making your equipment a confusing combination of new and
old. (Subject to credit approval)
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Tax benefits.
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For certain leases, you can deduct monthly lease payments as an
operating expense. Moreover, leasing may help your business avoid the Alternative
Minimum Tax (AMT).
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Improved balance sheet ratios.
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Unlike the traditional methods of financing, operating lease obligations
generally are not capitalized, improving balance sheet ratios.
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Options
for purchase or renewal.
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At the end of the lease you may
choose to purchase your equipment, upgrade it, or continue to lease it. Or, if
you're done with the equipment, return it.
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Reduced interest
rate risk.
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By locking in fixed payments now, you can avoid
the risk of inflation in the future.
