You pay only for the use of the asset, not for the ownership. This avoids tying up capital in assets. You receive 100% financing, eliminating the need for
a down payment. You can use this cash elsewhere in your company for expansion. You receive longer-term, fixed-payments, and potentially
lower payments as the Lessor receives the tax benefits of ownership.
Your existing bank lines of credit, which are limited, are not impacted. Leasing also is a less restrictive form of financing. You can improve ROE, ROI, ROA, and many other financial ratios by utilizing leasing instead of borrowing. You can avoid certain tax limitations. Lease payments are expensed and do not contribute to Alternative Minimum Tax exposure or to Mid-quarter depreciation penalties.
You avoid the risk of owning equipment that is no longer technologically useful or valuable. This risk is assumed by the Lessor.
You can include many services in the lease payment, such as insurance, installation, engineering, maintenance, and taxes. Leasing generally involves less "red tape" and time than conventional financing. Additional equipment can be acquired without renegotiating existing loan covenants. Creative structures also are available to meet your specific needs.
You can acquire needed equipment outside of the capital budget. Lease payments usually are paid out of the operating budget.