Leasing conserves on capital which is very important for companies that may need that capital to grow other parts of their business. Leasing is also an additional source of credit for present and future needs. Leasing allows for 100% financing, no down payment, no deposits and no required compensating balances. All costs can be financed from installation, service, shipping, maintenance contracts and training. All cost can be included in one monthly payment. Leasing also provides tax advantages, depending on the structure of the lease, you may be able to write off the entire monthly payment as an operating expense or capitalize the outlay. The interest portion on a finance lease is tax deductible.
Leasing improves a companies budget stability. When you lease, you have a fixed amount for the term of the lease, which makes it easier for a business to forecast expenses. This also allows a business to obtain equipment for unplanned events since their operating budget (verses capital budget) can accommodate a monthly payment.
Leasing also helps to avoid technological obsolescence. It protects you from being locked into owning equipment that may not meet your future needs. It gives you great flexibility to upgrade easily to the newest releases, features and functionality as soon as they become available. Leasing is also to your advantage at the end of the lease in that you have more options then in just owning the equipment. Your options include outright purchase of the equipment, you can refinance, upgrade or walk away at the end of the lease.