According to the Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-25), equipment leasing is currently a $521 billion sector. So why are so many organizations, large and small, choosing to finance the purchase of essential assets? Upon surveying our customers, we found there were six main reasons to lease.
Please let us know your thoughts. Why do you (or don’t you) finance your equipment or software purchases?
Manage Cash Flow – Paying for equipment as it is used conserves cash, and is the single biggest reason why most companies lease and finance equipment rather than purchase with cash.
Match Useful Life – Lease terms and types can be matched to the equipment’s expected useful life, enabling customers to keep pace with technological changes by upgrading to new equipment.
Leverage Purchasing Power – Companies can acquire the equipment they really need when paying for it over time, versus settling for what they can afford with available cash.
100% Financing – Customers can bundle project costs such as software, maintenance, training, consulting and shipping with the equipment into one convenient payment plan. Banks typically finance only 80-90% of hard costs.
Preserve Working Capital – Bank lines-of-credit and working capital can be kept intact for other short-term needs, such as growth and operations.
Tax Advantages – Depending upon the type of lease structure, customers may treat monthly payments as fully deductible expenses.
Please post your comments below or call me to discuss further, and thanks!
Mike Wright 512-458-1300 ext234