10 Things I Know About... Equipment Leasing
Jane McDonald is the director of marketing for Systematics Inc. in Westborough. She can be reached at jmcdonald@systematicsinc.com.
10. Alternatives Aplenty
Financing is becoming increasingly important as businesses strategically invest in their infrastructure. Leasing allows you to manage your cash flow better and conserve capital budgets.
9. A Capital Idea
With equipment leasing, cash can be used for other business uses such as expanding sales, marketing programs, increasing inventories, opening a new line of business, or simply cash reserves.
8. Tax Advantages
Operating leases are generally treated as fully deductible direct operating expenses, which means lower taxable income. In addition, lease payments are often treated as fully deductible expenses. This may mean a more rapid write-off to you.
7. Balancing Act
When leasing, you don’t have to show the equipment on your balance sheet because the equipment belongs to a different company.
6. No Down Payments
With an equipment lease, there is no down payment and typically one or two payments are paid up front.
5. Financial Forecasting
Lease payments can be calculated on a monthly, quarterly, semi-annual or annual basis. Once established, payment amounts and due dates never change.
4. Accurate Projections
There are no depreciation figures to be questioned, no varying interest costs to be estimated. Leasing helps take the guesswork out of budgeting.
3. Why Compromise?
Companies who lease can generally afford to buy more. More choices, more equipment, and lower costs allow you to get the equipment you need without compromising on choice.
2. Good Growth
Because a lease is not considered a long-term debt or liability, it does not appear as debt on your financial statement, making you more attractive to traditional lenders when you need them.
1. Less Is More
After examining the possibilities involved in a cash purchase or loan leasing often costs less than other methods of acquiring the equipment you need.
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