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Advantages of lease financing

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  • Advantages of lease financing

    • It offers fixed rate financing; you pay at the same rate monthly.
    • Leasing is inflation friendly. As the costs go up over five years, you still pay the same rate as when you began the lease, therefore making your dollar stretch farther. (In addition, the lease is not connected to the success of the business. Therefore, no matter how well the business does, the lease rate never changes.)
    • There is less upfront cash outlay; you do not need to make large cash payments for the purchase of needed equipment.
    • Leasing better utilizes equipment; you lease and pay for equipment only for the time you need it.
    • There is typically an option to buy equipment at end of lease term.
    • You can keep upgrading; as new equipment becomes available you can upgrade to the latest models each time your lease ends.
    • Typically, it is easier to obtain lease financing than loans from commercial lenders.
    • It offers potential tax benefits depending on how the lease is structured.

  • #2
    Re: Advantages of lease financing

    * Small upfront deposit and the option of a balloon payment.
    * Finance lease payments can be offset against tax.
    * User can decide when to cancel contract but will incur early termination charges.
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    • #3
      Re: Advantages of lease financing

      Improves cash flow. Purchasing expensive equipment can put a major dent in your cash flow as the amount of cash that flows out of your business temporarily exceeds the amount of cash that flows in, which often happens when you buy something big. Depending on how quickly the cash is replenished from revenues, the impact can be negative for some time. Many leases require no money down, with payments due monthly. The less cash you put out to acquire the equipment you need to run your business, the better your cash flow.
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      • #4
        Re: Advantages of lease financing

        Just thought I'd chip in with two cents here (tried to post this earlier, but hasn't shown up for some reason).

        Leasing has the advantage of being 'off' the balance sheet. In the case of operating leases, future rental payments are currently not included on the balance sheet of the lessee as a liability and the leased asset is not included as an asset. Operating leases differ from Finance leases in that the lessor enjoys the benefits and shoulders the risk of ownership while the lessee has possession and use of the leased asset. The lessee does not guarantee the residual value and returns the asset to the lessor at the end of the lease period.

        Insight: some businesses consider operating leases to be advantageous, especially if the efficiency of their operation is measured by reference to return on assets. However, it should be noted that future rentals do need to be disclosed by way of a note in the financial accounts. Sourced from http://flexicommercial.com.au/_blog/...es_of_leasing/

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        • #5
          Re: Advantages of lease financing

          Originally posted by Chris Red View Post
          Just thought I'd chip in with two cents here (tried to post this earlier, but hasn't shown up for some reason).

          Leasing has the advantage of being 'off' the balance sheet. In the case of operating leases, future rental payments are currently not included on the balance sheet of the lessee as a liability and the leased asset is not included as an asset. Operating leases differ from Finance leases in that the lessor enjoys the benefits and shoulders the risk of ownership while the lessee has possession and use of the leased asset. The lessee does not guarantee the residual value and returns the asset to the lessor at the end of the lease period.

          Insight: some businesses consider operating leases to be advantageous, especially if the efficiency of their operation is measured by reference to return on assets. However, it should be noted that future rentals do need to be disclosed by way of a note in the financial accounts. Sourced from http://flexicommercial.com.au/_blog/...es_of_leasing/
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          • #6
            Re: Advantages of lease financing

            Lease financing is emerged as one of the most important form of long term finance. If a company acquire right to use an asset without purchasing it from the owner of the asset is termed as lease financing. Lease financing is the written agreement or deed between the owner of asset and the company witch wants to use it without buying.
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            • #7
              Re: Advantages of lease financing

              Protects against obsolescence.
              Increases flexibility.
              Improves cash flow.
              Preserves capital
              Treats payments as expenses rather than debts
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              • #8
                Re: Advantages of lease financing

                Lease financing is one of the better known business strategy followed by most of the groups we can easily found the plans which are ideal to go with.

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                • #9
                  Re: Advantages of lease financing

                  Lease finance is more useful for the small and big company for the daily routine transaction. Lease finance we have to give back after some period, and on that lease finance business have to pay interest. So we can used lease finance and get more and more benefit.

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                  • #10
                    Re: Advantages of lease financing

                    Lease finance is more useful for the small and big company for the daily routine transaction. Lease finance we have to give back after some period, and on that lease finance business have to pay interest.

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                    • #11
                      Re: Advantages of lease financing

                      Lease Financing is one of the best alternatives to straight-up purchasing if you are seeking the means to obtain necessary business equipment and supplies that have the possibly to endanger your monetary flow and stockpile. British American displays.com and our finance partners will lease finance high-priced equipment to you instead of you having to flat-out buy all of your needs.
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                      • #12
                        Re: Advantages of lease financing

                        A lease is a legal contract between a lessee, the person leasing and a lessor, the person leasing the product out.
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                        • #13
                          Re: Advantages of lease financing

                          Leasing finance is really good and quite beneficial as we can make profit out of it.Your information really helps me to gather more about leasing finance as I am new in Business

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                          • #14
                            Re: Advantages of lease financing

                            your information helps me alot to enhance my knowledge

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                            • #15
                              Re: Advantages of lease financing

                              As per my opinion,Asset finance is a very flexible way of raising funds
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