LEASING VERSUS BUYING EQUIPMENT
Leasing can be a cost-effective alternative to purchasing new equipment, particularly for growing enterprises and organizations with concerns about cash flow.
Businesses planning to acquire new equipment should carefully consider the advantages our leasing programs offer:
Overcome Budget Restrictions: When new equipment is needed to improve business operations, waiting to save enough surplus cash to purchase may not be the best option. Postponing the acquisition of needed equipment might also cost more when you factor in lower productivity and reduced efficiency, lost revenues, higher maintenance bills and future price increases.
Conserve Operating Capital: When companies lease new equipment, their cash reserves and credit lines aren’t tied up in a depreciating asset. Those funds will still be available to invest in other areas of the business. Companies who lease will be in a better position to avoid unexpected financial emergencies, and take advantage of future opportunities to increase revenues and profits.
Cost-Justify Equipment: New equipment can generate higher revenues, reduce expenses, and provide access to new markets which companies will want to take advantage of as soon as possible. Usually the cost to lease new equipment will be less than the financial benefits gained. So by leasing, the new equipment pays for itself and the business can profit more quickly.
Take Advantage of Inflation: The fixed payments of a lease are paid with tomorrow’s less valuable dollars, effectively lowering the cost for leased equipment as time progresses.
Reduce Taxes: Leasing may provide for an allowable business expense which can offset revenues and lower a company’s taxable income. This makes it possible to invest in new equipment with “Pre-Tax Dollars” and leasing may offer faster write-offs than would normally be permitted under Capital Cost Allowance guidelines.
Simplify Accounting: A capital purchase requires depreciation schedules and capital cost allowance calculations, making it more difficult to pinpoint and assign costs for equipment. A lease has predetermined future payments that can easily be allocated as a direct expense to a particular project or department. Budgeting and forecasting are also less complicated when equipment is leased.
There are many potential advantages to be gained by leasing, including convenience. Arrangements to add new equipment can be made quickly and our simple application is often all that’s needed.
Contact Star Diamond today to find out how you can benefit from our programs and services.
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