Title: The Leverage of the Lease
Author: Brian Burns
Reference: http://ezinearticles.com/?The-Leverage-of-the-Lense&id=49300
Presenter: Ryan Buckley
Most companies buy their business equipment outright. Usually they do
this with their own cash or bank financing. Although this means that you
do not have to deal with much paperwork, it also has quite a number of drawbacks. First
of all, sometimes you need to but something and do not have the money to put
forth upfront. You could take out a loan, but then you would have lots
dept. And even if you want a lone, it is often hard to get one if you are
a start up company. If the going isn't good, you're going to have a hard
time convincing a bank to give you the loan you might think you desperately need. And
when you have that product that you paid so much for, it eventually will depreciate.
Leasing on the other hand is good because it doesn't require a large lump sum
of money. Then when it comes to tax time, you can put down lease payments
under the profit and loss account under assets. Taking this a step further,
higher assets means lower liabilities which in turn means higher net worth which
looks good for your investors. It also may be easier to pay off if going
though your bank is too time consuming. Then there is the fact that man
leasers will allow you to upgrade your equipment, which, sequentially, keeps
your equipment looking modern. Finally, the equipment can make money for you
while you pay for it, unlike paying for it upfront.
If you don't know anything about leasing, going through a broker might keep you
from going broke. Some reasons for turning towards this root are that it
helps match clients with leasers and is a non-biased 3rd party. It does
this by looking at the clients needs, such as: type of business, age of the business,
credit history, and other things like that.