Leasing allows you to meet your goal of growing tomorrow without overstretching your cash position today – regardless of whether your growth hinges on a new factory, machinery, vehicles, information technology or medical equipment.
The preservation of cash flow compared to conventional financing is the most attractive benefit of leasing. It doesn’t require the cash outlay for a large asset purchase and can be used to overcome budget limitations. Existing cash position and lines of credit remain free and liquid for other working capital needs that have higher ROE and/or ROA metrics
Hedges Against Inflation
In an operating Lease, payments are made for the use of the asset. You do not pay for ownership on equipment that consistently depreciates. Furthermore, your cash savings can yield a return that fights inflationary pressures.
Unlike typical financing methods, leasing provides 100% financing for asset acquistion. Most costs incurred in acquiring an asset can be financed by the lease. These costs include delivery charges, interest charges on advance payments, sales or use taxes, installation and training costs. Such costs are not usually financed under alternative methods of asset financing.
Arrange Faster And More Affordable Credit
Leasing companies are generally more accommodating than banks and other financial institutes in respect of terms of financing. As such, it has generally been found that acquisition of assets under leasing arrangement is cheaper and faster as compared to acquisition of assets through other sources of financing.
Lease arrangements helps to protect the lessee against the risk of obsolescence in respect of the assets which become obsolete at a faster pace.
The growth rate of leasing activity increased by 26% over the previous year