Leasing protects against obsolescence.
Technology products frequently become obsolete before they can be fully depreciated. That means you either have to take a book loss on the equipment or carry a 'stranded asset' on the books. Leasing allows you to take advantage of the latest technology available while giving you the flexibility to make changes and additions when needed. Leasing protects you from the risk of technological obsolescence because the leasing company assumes that risk for you. You get all the benefits of using the equipment without having to worry about what to do with it when it is out of date.
Leasing simplifies budget approval.
Leases can be categorized as operating expenses. That means it's usually much easier to attain approval to lease equipment, rather than purchase it, because operating expenses generally require a much lower level of approval (department level vs. corporate) than purchases.
Leasing reduces up-front costs.
Conventional bank financing typically requires a minimum balance. With leasing, there is no minimum balance or down payment required.
Leasing makes cash flow more predictable.
Insight Global Finance generally sets fixed payments for the term of a leasing contract, whereas a loan often has a variable interest rate. Thus, leasing makes it easier to manage and anticipate cash flow.
Leasing preserves working capital.
Leasing expands your company's financial resources without affecting established credit lines. A helpful rule of thumb is to buy only assets that appreciate, and lease those that depreciate. Why buy an asset that has limited life, when you could lease it, and invest your available cash in assets that will appreciate in value. When you lease, you get full access to the equipment you need for your business, and you only pay for the portion of the asset that you use rather than the entire asset. Leasing offers tax advantages. Many companies realize significant tax benefits from leasing their technology. Monthly lease payments are generally tax deductible and can be treated as a business expense. Consult your accountant or tax advisor for specific details on this important benefit.
Leasing gives you the ultimate financial flexibility.
Insight Global Finance can structure the terms and length of the contract to fit your business requirements, and you can always upgrade the equipment or add additional components. When the lease ends, you can choose to return or buy the asset, or to renew the lease for another term. Leasing is the least restrictive, most flexible financing alternative, and gives you the freedom to make changes and choices that suit your needs. |
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