Potential Tax Savings
100% of the payments may be written-off during the “Term of the Lease”
Avoids Capital Outlay
Lenders will often require 20-25% down-payment for loans. Leases are 100% financing. Most lessors require the first and last payment at closing. This is generally far less than the down-payment for a loan.
Removes Debt From the Balance Sheet
Leases are not loans. If properly structured, leases are not shown on the balance sheet as debt.
Preserves Bank Credit Lines
Many lenders have loan agreements which limit the amount of debt a company may incur, debt/equity requirements, or debt-service-coverage requirements. Equipment leasing is one way to get the equipment you need while adhering to loan agreement covenants.
