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Why It Makes Sense To Lease Saves Working Capital If you buy the equipment outright the capital invested, in effect, becomes tied up in a depreciating asset. This means it cannot be used for other projects. Leasing equipment allows you to save resources for other purposes such as new business opportunities, responding to unexpected problems, or investment in product development or marketing. Easier Budgeting Payments made throughout your lease arrangement are not affected by changes in interest rates. So, unlike a bank loan or overdraft, you can accurately plan for lease payments in advance. This helps simplify the budgeting process. Tax Efficient If you pay corporation tax, leasing can be particularly attractive. Leasing payments may be deducted from taxable profits, which reduces the net cost of leasing the equipment. Upgrade Options Leasing allows your business to keep up with changes in technology and respond to any industry or competitive pressures. Your original installation can be altered, either during or at the end of the lease, to accommodate unforeseen changes. 100% Financing A deposit need not be a prerequisite to the leasing arrangement. You simply make regular payments throughout the life of the agreement. Future Credit Line If you lease the equipment then existing credit lines, such as arrangements with the bank, remain intact. This gives you the additional flexibility to use these arrangements if necessary in the future. Regular Payments When you lease, you make a series of regular (usually quarterly) payments instead of a large capital outlay. Leasing payments are usually spread over a period of 3 to 5 years.
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