Leasing usually requires only the payment of fixed regular rentals, without a deposit. This eases any immediate cash flow objections and often enables customers to acquire more equipment than they might have originally considered.
Unlike many alternative methods of financing, lease rentals are fixed for the duration of the agreement. Customers can budget accurately without worrying about possible interest rate rises.
By leasing an item of equipment, customers are able to match the economic benefit gained by using the equipment, to their chosen lease term. In this way, the equipment is paid for as it works for their business.
Leasing allows customers to keep existing bank credit lines open, for working capital purposes.
Bank finance can often be varied or even withdrawn altogether with virtually no notice. A lease is non-cancellable and cannot be withdrawn, even if a customer’s financial position deteriorates.
Lease rentals are usually tax deductible, as an operating expense of the business, therefore significantly reducing the effective cost of a leasing agreement.