Advantages to Leasing:
Conservation of Capital
Cash flow is critical! Leasing equipment conserves capital. This allows you flexibility in using capital for other company purposes (increasing inventories, expanding sales, etc.). Leasing also offers 100% fixed financing – no large down payments required.
Conservation of Credit
A lease is not a loan. Borrowing reduces precious working capital and lines of credit. Leasing is thus a NEW credit source. When “money is tight” this is important.
Balance Sheet Effect
If equipment is purchased and money borrowed, the LIABILITIES are increased. Asset-to-liability ratio will be impaired. Liquidity will be decreased.
If equipment is purchased outright (by cash), fixed assets are increased, current assets are decreased. Less liquidity again.
Avoids Dilution of Ownership Equity
It is better to lease the equipment than to dilute ownership in the company through equity financing.
Keep your equipment current! If you lease the equipment, you won’t keep it beyond its useful life, eliminating concerns about changing technology and obsolescence.
Overcomes Tight Budget Limitations and Lengthy Budget Approval Process
In large corporations, a purchase may involve many corporate signatures and even a delay until next year’s budget. To acquire the equipment through a lease, which is an operating expense, the authorization process is simplified, and the equipment can be obtained immediately.
Reduces Cost of Inflation
Paying with tomorrow’s dollars for the equipment you obtain and use NOW – acquire the equipment at today’s dollar value and pay for it over the term of the lease in dollars that are devalued if inflation occurs.
Fast Tax Write-Offs
An operating / tax lease can be written off 100% as an operational expense – each payment is 100% tax deductible.
With IFS, you get prompt response, competitive financing and lease solutions, and guaranteed follow-up.
Let IFS show you why nearly 50% of our business is from repeat customers.