About the Talk
November 17, 2014 3:00 AM
There are many benefits to leasing your equipment and business assets, extending from less financial influence to suppleness in delivering the need and appropriateness of equipment.
AXIS Capital, Inc. is a Direct Lender group of companies providing quality equipment leasing/financing services along with superior customer service, headquartered in Grand Island, Nebraska; AXIS has grown to become an industry leader serving equipment vendor nationwide (i.e. SE Asian countries such as KL Malaysia, Bangkok Thailand, Jakarta Indonesia and many more) presents the followings advantages of business equipment leasing.
Reduced initial cash outlay. The chief benefit of leasing is that you can in general increase the use of an asset minus an initial cash expenditure than would be obligatory if you bought it. Equipment leases seldom entail down payments.
Easier credit terms. You'll possibly have a simpler time discovering someone eager to lease you equipment rather locating someone keen to lengthen you credit to buy the equipment. One motive is that with a lease, title to the property stays with the lessor consequently if you overlook some payments, the lessor can hurriedly get the equipment back. Also, under a lease you may can bargain a lengthier payment phase =ensuing in reduced payment amounts= and/or a more supple payment timetable =ensuing in a improved matching of your payment obligations with your cash flow= than you would be able to bargain under a loan.
Avoidance of financial limitations. This furthermore means evasion of possible complaints. An equipment lease seldom comprises any provisions that limit your future financial operations. In the contrary, it is not rare for a loan arrangement to contain limitations on your capacity to purchase additional equipment or to have a loan of extra capitals without the lender's consent.
Flexibility in addressing outmodedness. Leasing may allow you to better save pace with developing technology. You'll have an simpler time compelling yourself to invest in modernized equipment if you learned your existing equipment under a short-term lease or a lease that consist of an equipment replacement provision for computers, communications devices, and other equipment that is subject to rapid technological improvement..
Flexibility in addressing need and appropriateness. If you're not certain whether you actually need a specific item of equipment, leasing an item on a short-term basis will give you the chance to assess the item's usefulness to your business deprived of obligating to a considerable investment. You can as well use short-term leases as a method to test and match diverse brands and models.
Maintenance support. Under some leases the lessor may decide to be accountable for maintaining and fixing the leased equipment. Even though the cost of this service will generally be factored into your rental payments, you'll at least keep away from the difficulties of having to locate eligible repair persons and of being troubled with accidental repair costs. Moreover, a receptive lessor who is acquainted with the equipment being leased can considerably decrease your equipment's stoppage when repairs are needed.
Current deductibility of rent. Leasing offers a potential tax benefit in that your lease or rental payments are completely deductible if you use the leased asset in your business. In deliberating whether leasing will offer an definite tax advantage, on the other hand, you need to ponder the matching drawback of being deprived of any depreciation deductions with respect to the leased property, as well as you should always be watchful and avoid scam.
Balance sheet appearance. A regularly stated benefit of leasing is that it may increase definite financial indicators, like your debt-to-equity and earnings-to-fixed-assets ratios. The development happens if you're capable to eliminate your leased assets and their matching rental responsibilities from your balance sheet nonetheless do comprise the earnings the assets yield (net of rent expenses) on your income statement. The definite advantage of the developed indicators may be insignificant, as careful lenders will possibly associate your lease obligations with long-term debt obligations. Present accounting rules have furthermore worn this advantage by demanding you to report on your balance sheet assets leased under several financial leases.