LEASING 101
- Why Customers Lease
 Leasing
is Affordable
o Leasing allows the customer to afford an equipment investment without a single,
lump-sum expenditure. This means a sale can be made to customers who couldn’t
normally afford the equipment, or who are at the end of the budget cycle.
Leasing
has Tax Advantages
o An Operating Lease allows the customer to deduct the monthly lease payment
as an operating expense, lowering the effective after-tax payment up to 45%.
Leasing
has Financial Advantages
o Leasing offers off-balance sheet financing and improves customer balance
sheet appearance.
Leasing
Helps Cash Flow
o Leasing more effectively matches incoming and outgoing cash flows for the
customer – improving overall business operation.
Leasing
Frees Capital
o Your customer has better things to do with their money. The customer’s
capital is better spent on hiring, R&D, expansion and other mission-critical
business needs.
Leasing
Eliminates Obsolescence Worries
o With Fair Market Value leases, your customer has greater flexibility to trade-in,
upgrade, or change the equipment to meet their growing needs.
Leasing
Eliminates Financial Restrictions
o It is not uncommon for bank loan agreements to fund only a portion of the
equipment cost or require substantial down payments. Many loan agreements also
contain restrictions requiring the customer to get the lender’s permission
before acquiring additional equipment or borrowing more money. Leasing rarely
requires down payments and doesn’t restrict future acquisitions.
Leasing
Makes it Easy on the Accountants
o Lease payments are little more than a line item in the customer’s monthly
cost of operations
o Leasing eliminates the hassle of depreciation schedules and accounting for
equipment disposals. |
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