All About Leasing
A lease is simply an agreement between you, the business owner (lessee),
to pay rent for a specified period of time in exchange for the use of the owner's, leasing company (lessor), property.
The lessee does not own the property during the term of the lease.
80% of American businesses lease equipment. If an asset appreciates, buy it; if it depreciates, lease it.
Leasing Pays for Itself:
Leasing allows you to purchase the equipment you need without imposing on your company's cash flow.
Also, lease payments are made from future dollars, providing present savings, as today's dollars are worth more now than future dollars.
Leasing Preserves Credit Lines and Capital:
Leasing provides an additional source of funds, which supplements existing credit lines.
Your available capital is increased because other credit lines are left unencumbered for operations, expansion and acquisitions.
Leasing Can Reduce Taxes:
Unlike loan payments, lease payments may be fully deductible as an operation's expense.
Leasing Provides Flexibility:
Monthly or periodic payment terms ranging from 12 to 60 months allow for simplified budgeting.
Your payment schedule can cover all the costs associated with acquiring equipment, including installation, training, maintenance and freight.
Leasing Can Guarantee Obsolescence Protection:
Under special programs with LCA, you can upgrade the equipment leased through LCA,
during or at the end of the lease, as technological advances occur or as your needs grow.
What Happens At The End Of A Lease?
You have the option to purchase, re-lease, or return the property to the lessor.
When the property is to be purchased, three options can be considered:
A "Buck Out" option means at the end of the lease you may purchase the equipment for $1.00.
A "10%" option means that you will purchase the property for 10% of the original value. Other percentage levels can also be chosen.
The "FMV" is the Fair Market Value approach, where the property is purchased at the current, end of lease, Fair Market Value.
that if you lease your equipment,
you will have a positive cash flow
even after paying your monthly lease payment!!!!!!