- Preserve your borrowing capacity
- Improve your return on assets and equity while reducing your debt
- Obtain 100% financing
- Optimized tax benefits
- Upgrade more freely
- Acquire profit-making tools you might not otherwise be able to afford
Top 10 Advantages of Leasing
10. Conserves Capital and Preserves Bank Lines – Leasing frees up cash for other income producing investments and can be structured to allow faster tax write off. A lease covers many soft costs and doesn’t require significant down payments. Your new equipment is making profits immediately without touching your cash reserve thus allowing you to use cash resources in other areas. Additionally it keeps your credit lines open to handle seasonal inventory requirements or emergencies. Banks are often reluctant to grant fixed rate equipment loans, tend to require larger down payments and compensating balances, and are not knowledgeable about equipment purchases.
9. Overcomes Tight Budget Limitations – Many firms have found that small monthly payments for leased equipment can be squeezed into the tightest of budgets. A lease helps justify a purchase to management who may have delayed a decision until next year because of budget restrictions. Leasing enables companies to acquire equipment they might otherwise have not been able to afford.
8. 100% Financing – Leasing provides 100% financing on the equipment you need including software! Service contracts, training, sales tax, freight and installation charges can all be incorporated into the lease structure, reducing the initial cash outlay.
7. Hedge Against Inflation – Through leasing you can acquire use of equipment at today’s cost, but you monthly expense payment is made with tomorrow’s inflated dollar. This is the clearest advantage of leasing.
6. Eliminating Obsolescence – Advances in technology are being made quickly. To help you remain competitive National Machine Tool Financial can offer no penalty upgrades so that your equipment is always “state of the art”.
5. Fast Tax Write Off (Operation Lease) – A true lease (without mention of purchase price at termination) can be written off 100% as an operation expense which is faster than depreciating the equipment. The resulting deferral of tax liability results in lower cost on a present value basis.
4. Balance Sheet Effect – Leasing provides off balance sheet financing and is recorded as an operating expense providing greater flexibility to overall corporate planning. Equipment which is purchased with borrowed money increases liability and decreases liquidity. Similarly cash purchases have the same effect by increasing fixed assets and decreasing current assets, therefore reducing liquidity necessary for future business decisions.
3. Leasing Is Convenient And Flexible – Easy documentation and credit processing, unlimited choice of equipment and vendors, inclusion of soft costs and a wide variety of payment schedules to meet any budget challenge contribute to make leasing the right financial move for the new millennium.
2. Equipment Leasing Pays For Itself – Through leasing you pay the monthly rentals out of savings or increased profits derived from the equipment use. Would you pay your office staff their salary 3 or 5 years in advance? That is what you effectively do when you pay cash for you equipment.
1. Your Company Grows With Reduced Risk – Through incremental monthly payments you can expand and evolve your business to meet the next competitive challenge. The idea behind your equipment acquisition is business growth, National Machine Tool Financial is committed to providing you flexibility and professional responsiveness to help you meet your business objectives.