Wondering how leasing can provide significant advantages over other acquisition strategies? Benefits include:
Companies need to fund receivables, inventory, payroll, and equipment. Some businesses may not have access to bank loans or supplemental sources of capital. Often a shortage of capital can develop – especially in a bad economy. Leasing can help prevent this from happening by reducing the capital required for your equipment.
Funding your equipment acquisitions with a conventional bank loan usually requires a 10 to 20 percent down payment and often includes restrictive covenants. Leasing, on the other hand, normally requires simply one or two monthly payments in advance, which are applied to future payments.
Most companies operate under budgetary constraints – the result of a formal planning process or the availability of funds. With formal planning, you can use leasing to bypass your capital budget since payments are usually accounted for as expenses. If your budget is based on capital resources available and you can’t fund the full purchase price, a payment option is often the answer.
Leasing keeps technology up-to-date by facilitating periodic replacement of technology assets and permitting replacement, even if capital resources are not available.
When you reach the end of your lease, you can return the equipment – that way, you can avoid the hassles, costs, and liabilities involved in disposing of technology equipment.
In most cases, your lease covers all expenses, including the full cost of the equipment, service, shipping, installation costs, and maintenance.
Owed assets are normally capitalized. Therefore, deprecation and interest expense are written off for tax purposes. Monthly lease payment are typically viewed as operating expenses – this usually offers significant tax benefits! (You should always consult with a financial advisor to deterring the proper tax strategy.)
If leasing sounds like the right choice for your company, Alliance can offer you access to competitive lease rates on hardware, software, maintenance and professional services products. Contact us at 888-891-8885 (option 1) for details