Sales Make it Happen

Ten Advantages in Leasing

by Christopher Menkin

It's not who owns the equipment, but the use of the equipment that makes the profit.

Ten Advantages in Leasing:

1. Saves Cash - no money "down".
2. Usually longer term available, resulting in, lower monthly payment.
3. Fast and convenient - less hassle for long term "borrowing".
4. Tax benefits , such as faster write-off; more rapid amortization than possible with "depreciation".
5. Provides cost-cutting or profit making equipment to be installed immediately.
6. Pays for equipment out of before-tax savings rather than after-tax profits.
7. Leverage - leaves normal lines of bank credit undisturbed.
8. Avoids alternate corporate minimum tax.
9. May increase the firm's ability to acquire funds, plus does not dilute ownership.
10. Creates or maintains working capital for inventory, accounts receivable, other expenses.

National Business Institute reports a recent survey indicates the Top Five Reasons for Choosing Leasing :

1 .   *41%----Cash flow---capital outlay.

2 .  *18%----Rapid technological changes cause product obsolescence.

3 .  *10%----Financial requirements are not as stringent.

4 .  *10%----Leasing companies are more accommodating than banks.

5 .  *08%----Tax implications.