| Benefits of Leasing |
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- Leasing can
provide 100% financing. A lessee
may qualify for 100% financing of the cost
of the equipment plus any of the “soft”
costs such as design, engineering,
transportation and installation, etc
- Leasing maximizes
utilization and ROI. Leasing allows for a
set monthly cost for equipment which results in
easier means of projecting anticipating
profitability of the equipment usage.
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- Leasing can
bank lines of credit. With the
current challenging banking environment,
lines of credit are now often difficult to
obtain and necessary to preserve for
potential growth opportunities and/or cash
flow challenges. Large capital expenditures
are often substantial financial risks for a
company. Leasing is a tool to help mitigate
investment risk and allows for growth
opportunities through preservation of
capital.
- Leasing helps to
increase purchasing power. When a company
is growing at a rapid pace, leasing large capital
assets is a valuable tool to give a company its
necessary equipment without hindering its current
balance sheet or potentially limit borrowing power.
- Leasing can be a
hedge against interest rate risk, inflation and time
value of money. Lease payments are an
agreed upon set monthly payment, isolated for
interest rate volatility and inflation.
Additionally, leasing provides for capital
preservation, allowing a company to pay over time
instead of a large capital expenditure up front;
time value of money is money received over time by a
leasor is less valuable than money received in a
lump sum today.
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