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Why Lease?
• Leasing May Be Your Best Option
Leasing is the only option for acquiring equipment in which you do
not become the owner of the equipment.
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Increased Return on Assets (ROA)
Since a leased asset does not appear on your balance sheet and
leasing can result in improved reported earnings, your ROA (Net
Income/Total Assets) is improved through lease financing. Since ROA
can be an important yardstick for your company and its managers,
this benefit of leasing can become very significant.
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Preserves Credit Lines
Leasing is an additional source of funding, allowing you to keep
existing credit lines available for your business needs, much like
keeping a cash reserve. Why not invest in your business rather than
using the capital to fund the infrastructure.
• Technology Obsolescence Hedge
The largest risks in owning equipment is the risk of obsolescence
before the asset can be fully depreciated. This can result in a book
loss upon the sale of the equipment or, in the best case, a
"standard asset" being carried on the books, but not serving a
useful purpose. Leasing separates the benefits of using equipment
from those of owning equipment and allows you to hedge the risk.
• Simplifies Budgeting
The fixed monthly payments allow you to know exactly what cash
outlays are required for the duration of the lease. Some customers
find that, without the need to calculate interest amortization or
depreciation, time and effort can be saved by simply expensing lease
payments. Leases can be approved faster as part of operating
budgets, rather than undergoing a potentially tedious capital budget
approval process.
• Protects Against Inflation
Fixed-payment leases let you know exactly what your monthly cash
outlay will be for the duration of the lease. Variable-rate leases
enable you to take advantage of falling interest rates.
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• Competitive Edge which maintains the Flexibility to
Upgrade
Leasing provides the flexibility to use the latest technology, which
is important for maintaining a competitive edge.
Our Leases contain
provisions for: Equipment Swaps, Lease Rollovers, Coterminous
Upgrades of Lease Equipment
These options allow
you to easily match equipment capacity to the ever-changing needs of
your business, both planned and unplanned. If equipment is owned,
issues such as capital acquisition processes, market value versus
book value, and access to secondary markets for disposal make it
much more difficult to be responsive to a changing business climate.
• Off Balance Sheet Financing
Providing that a lease qualifies as an operating lease, you need not
show the lease commitment nor the corresponding assets on you
balance sheet. This has the effect of improving many of your
company's financial ratios.
• Customized Payment Flexibility
In addition to standard leasing arrangements, you can also select
from such flexible options to tailor payments to your specific
cash-flow needs. Deferrals, Step-Up Structures, Step-Down Structures
• Conclusion
Since leasing is the best use of cash, gives the best return on
investment, conserves capital, and preserves lines of credit,
leasing is the preeminent procurement method of choice. |