What are the advantages of leasing?
- Conserves Cash: Leasing provides 100% financing. Capital can be conserved and used to finance other projects or activities.
- Access to Capital: Leasing does not impact existing credit lines – e.g. an existing bank operating line, thereby providing another source of capital.
- Budgeting: With fixed (monthly, quarterly, annual) payments, cash flow is more predictable making budgeting easier.
- Certainty of payment: The interest rate and payments are known for the term of the lease regardless of fluctuations in market interest rate.
- Protects against obsolescence: Equipment can be returned at the end of the lease and replaced with updated equipment.
- Flexibility: There are numerous ways to structure lease payments to meet the particular requirements of the lessee.
Last Updated: November 17, 2020