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Why Lease Purchase?
Look at the many Leasing Advantages:
1.Preserve
Working Capital / Cash Flow: Leasing conserves your working capital for
use where it will produce the best return. Example : Inventory Business
Development, Accounts Receivable, Real Estate.
2. Credit
Lines : Leasing equipment leaves your existing credit lines available
for short term needs. Example : Inventory Peaks, Trade Discounts, Accounts
Receivable.
3. Tax
Position : Lease payments are 100% deductible as a business expense, as
opposed to only depreciation and interest deductions for financed equipment. A
full write off over the lease term reduces your after tax cost substantially.
4. Budget
Restrictions : Minimum cash outlay plus modest payments enable you to
fit the lease into the tightest of budgets. When your spending schedule is
severely limited, leasing makes it possible to obtain the equipment you need
when you need it.
5.
Balance Sheet Effect : The effect of leasing on financial ratios is
very favorable. Examples : Shows a faster turnover of assets, better earning
power for investment, less financial risk, and debt to equity ratio is less.
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More reasons why leasing makes sense:
LEASING EQUIPMENT provides
PROFITS AND SAVINGS today with
tomorrow's dollars.
Approximately 80% of U.S. Companies lease some, or all, of
their equipment. The U.S. Commerce Department forecasts that 33% ( $153 Billion ) of the
$476 Billion worth of equipment acquired by businesses this year will be leased.
Most equipment types, new or used, can be leased or financed. Leasing is
available to businesses, professionals, municipalities, school districts. Suppliers of
equipment use leasing to help their customers to obtain the equipment they need.
Favorable Financial Reporting: According to the Financial Accounting Board
(FASB), you generally can list your lease payments as an operating expense, rather than as
a debt. Off balance sheet financing may keep your liabilities and debt -to-equity ration
low, which can enhance your company's attractiveness to lenders and investors.
Measurements of Return on Investment (ROI) and Return on Assets (ROA) may also look
better.
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Last modified:
March 17, 2008
Call us at (904)
296-8200
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