Leasing Offers Many Possible Benifits
1. Tax Benefits
Leasing payments may be considered pre tax dollars and be fully deductable operating expenses.
Leasing may eliminate the need for complex depreciation schedules and could accelerate tax benefits.
You may avoid the Alternative Minimum tax by paying for the equipment out of current untaxed income, instead of from pre-taxed profits
2. Financial reporting
Leased equipment is its own collateral
Leased equipment is not required to be capitalized in financial statements
Leased equipment is footnoted so a company’s financial ratios and measurements improve.
Leased equipment does not create a liability so a company appears less leveraged.
3. Avoid Obsolescence
During or at the end of a lease you may have the option to upgrade to a more technologically advanced product. This helps keep your business competitive. If you are going to upgrade, a simple phone call and the remaining principle balance of the old equipment is added to a new lease.