Equipment lease financing as opposed to purchase financing, is gaining more and more popularity due to its many advantages. Among these advantages are:
No Down Payment: With leasing, there is typically no down payment required. You can finance 100% of the cost; in fact, you can finance more than the cost of the equipment. Additional expenses such as taxes, installation, delivery, and maintenance can usually be added to the lease.
The Tax Benefit: Lease payments, in many cases, are 100% tax deductible. Bank-financed equipment must be depreciated over a longer period of years, and only the interest portion of the payment is deductible. The after-tax cost of equipment is typically lower through leasing than any other means of acquisition.
Minimized Obsolescence: At the end of the lease, you have the option to return the equipment if you no longer need it or want to upgrade it. This way, you are not stuck with obsolete equipment and are free to upgrade and re-evaluate where your monthly dollars may be best spent.
Less Hassle: On transactions under $100,000, typically no financial disclosure is required. No financial statements, tax returns, pro formas, business plans, etc. are necessary. And no loan committee run-around.