Leasing May Be Your
Leasing is the only option for acquiring equipment in which you
do not become the owner of the equipment. This can have some
significant advantages that can contribute to the success of
One of the largest risks in owning equipment is that the equipment
will become obsolete before it can be fully depreciated. This
results in a book loss upon the sale of the equipment or, in
the best case, a "standard asset" being carried on
the books, but not serving a useful purpose. Leasing separates
the benefits of using equipment from those of owning equipment
and allows you to hedge the risk.
Leasing lets you invest in your business, not in the infrastructure
to fund it.
Leasing provides the flexibility to use the latest technology,
which is important for maintaining a competitive edge.
The fixed monthly payments allow you to know exactly what cash
outlays are required for the duration of the lease.
Our Leases contain provisions for:
- Equipment Swaps
- Lease Rollovers
- Coterminous Upgrades of
These options allow you to easily match
equipment capacity to the ever-changing needs of your business,
both planned and unplanned. If equipment is owned, issues such
as capital acquisition processes, market value versus book value,
and access to secondary markets for disposal make it much more
difficult to be responsive to a changing business climate.
Simplifies Budget Allocation
Some customers find that, without the need to calculate interest
amortization or depreciation, time and effort can be saved by
simply expensing lease payments. Leases can be approved faster
as part of operating budgets, rather than undergoing a potentially
tedious capital budget approval process.
Preserves Credit Lines
Leasing is an additional source of funding, allowing you to keep
existing credit lines available for your business needs, much
like keeping a cash reserve.
Protects Against Inflation
Fixed-payment leases let you know exactly what your monthly cash
outlay will be for the duration of the lease. Variable-rate leases
enable you to take advantage of falling interest rates.
Off Balance Sheet Financing
Providing that a lease qualifies as an operating lease, you need
not show the lease commitment nor the corresponding assets on
you balance sheet. This has the effect of improving many of your
company's financial ratios.
Increased Return on
Since a leased asset does not appear on your balance sheet and
leasing can result in improved reported earnings, your ROA (Net
Income/Total Assets) is improved through lease financing. Since
ROA can be an important yardstick for your company and its managers,
this benefit of leasing can become very significant.
Using, Not Owning
Operating profits come from the use of equipment, not the ownership
of it. Leasing allows equipment use without the risk of ownership.
Customized Payment Flexibility
In addition to standard leasing arrangements, you can also select
from such flexible options to tailor payments to your specific
- Step-Up Structures
- Step-Down Structures
Since leasing is the best use of cash, gives the best return
on investment, conserves capital, and preserves lines of credit,
leasing is quickly becoming the procurement method of choice
by virtually all types of businesses that require any type of
technology ... from personal computers to the largest multinational