Businesses, small and large use leasing because it offers so many advantages:
Saves working capital
If you buy equipment outright your capital becomes tied up in a depreciating asset, preventing you from investing in other projects, whereas financing the equipment allows you to save resources for new business opportunities and unexpected needs.
Payments are fixed throughout the agreement and are not effected by inflation or changes in interest rates. You can accurately plan for lease payments in advance, helping you to simplify budgeting.
Maintains credit lines
If you lease the equipment, existing credit lines with your bank remain intact. You therefore retain the flexibility to use your banks facilities in the future.
Leasing allows your business to keep up with changes in technology and respond to any market or competitive pressures. You can add to or upgrade your original installation to accommodate changes in your requirements.
If you pay corporation tax, leasing payments may be deducted from taxable profits, which reduce the net cost of leasing the equipment.
Your payments can be made by direct debit. You can avoid unnecessary time organising payment for equipment rental invoices.
A deposit may not be a prerequisite to the finance agreement. You simply make regular payments throughout the life of the agreement.
`Leasing helps you spread the cost of using equipment over a pre-agreed period by making regular (usually quarterly payments instead of a large capital outlay.