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% financing – no large down payments required.
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.
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.
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.
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.
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.
An operating / tax lease can be written off 100% as an operational expense – each payment is 100% tax deductible.
With IFSC, you get prompt response, competitive financing and lease solutions, and guaranteed follow-up.
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