Advantages of Leasing

There are so many reasons to lease, no wonder 80% of U.S. companies lease more than 35% of their equipment.  The main advantages for leasing fall into four main categories: 

1. Cash Flow

• Preserve working capital for needs such as Accounts Receivable and inventory
• Hedge against inflation with fixed payments
• Conserve bank lines of credit
• Avoid restrictive loan covenants
• 100% financing including acquisition, maintenance, taxes and other soft costs
• No down payment
• Sale-Leaseback provides instant cash
• Flexible payment schedules to match your company's cash inflow
• Equipment add-ons and upgrades can easily be added to the Master Lease Agreement

2. Tax

• Immediate expensing of operating lease payments
• Expense depreciation and interest portion of capital lease payment
• Avoid Alternative Minimum Tax
• Helps non-taxpayers to realize tax benefits through lower payments

3. Accounting

• Match the expense of an asset with revenue generated by that asset
• Equipment in an operating lease is generally not considered an asset
• Financing in an operating lease is generally not considered a debt
• Simplified budgeting and forecasting with a fixed lease payment
• Use operating funds to make payments when the capital budget is constrained

4. End of Term

• Several options are available:
• ­ Purchase
• ­ Return
• ­ Extend term
• Eliminate problems of equipment disposal
• Hedge against equipment obsolescence

Contact OFC to discuss which lease products best meet your needs.