Benefits of Leasing
1. Improve Cashflow
Your new equipment can be installed and operational without the need for capital expenditure. Your valuable cash can then be used where it will produce the best return, such as in investment, operating activities or for short term funding needs.
2. Retain Credit Lines
Hold on to your existing banking arrangements and credit lines free for more appropriate uses. Focus Leasing finance facilities cannot be withdrawn like overdraft facilities.
3. Simplify Budgeting
Lease payments are fixed for the whole term avoiding the effects of inflation and making cash flow forecasting and budgeting simpler. Bank facilities are generally related to interest rates, which is fine when they are low but can cripple cashflow when they increase.
4. Keep Up To Date
Combat obsolescence problems or requirement changes as the leasing equipment can be supplemented or upgraded at any time in the future.
5. Let the Equipment Pay for Itself
Enable the finance payments to coincide with the benefits of having the new equipment as they start to appear. After all, you wouldn't pay all your staff costs up front! Finance payments may be financed as you go along by extra income obtained by having the new equipment. You can have equipment at today's prices paid for from tomorrow's income.
6. Tax Savings
In the case of lease rental, all rentals paid are 100% allowable as an expense for tax relief often providing tax savings. You only pay VAT on the rentals as they fall due whereas with a cash purchase the full amount of VAT is payable on day one. |
