Equipment lease rather than a purchase loan ultimately saves you money. How? Well, there are at least 3 ways:
1. Capital conservation
Every time your company acquires equipment, you are financing the cost even if you pay cash. A law of business says, "Don’t put your cash in depreciating assets." Leasing allows you to pay off the equipment as income is earned from its use.
2. Longer term, lower payments and no down payment
Equipment can often be leased for a considerably longer period of time than conventional bank financing, affording a lower monthly outflow of cash. With leasing, there is no down payment required and 100% of the cost can be financed. Usually, the tax, installation, delivery, maintenance agreements, and training expenses can be added to the lease, if desired.
3. Non-bank leasing frees up your credit line
It comes as a surprise to many business people when the available cash they have been counting on through their bank credit line is reduced by the amount of equipment leases they have done with that bank’s leasing department. More and more money managers are establishing multiple, unrelated credit sources by turning to independent, non-bank leasing companies.