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Leasing |
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Leasing is a great tool for companies seeking to purchase equipment
without draining valuable cash reserves.
Below are answers to some questions you may have about leasing.
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What is a Lease?
A lease is an agreement between an owner of equipment (lessor)
and a business that has a need for the use of that equipment (lessee). Although
the lessee is not the owner of the equipment yet, most of the responsibility,
such as taxes, maintenance and insurance, is passed to the lessee. At the
termination of the lease, the lessee can purchase the equipment, continue to
lease or return the equipment to the lessor. |
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Who Leases?
80% of all businesses and 70% of all Fortune 1000 companies lease
equipment for their operations. |
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Why Lease?
Capital Conservation
Leasing lets a company conserve its working capital for inventory and other
alternatives that give a valuable return, without forgoing the acquisition of
needed equipment. |
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Additional Lines of Credit
Leasing is an alternative form of financing that leaves your bank lines in tact
by establishing an additional credit line with the leasing company. |
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Equipment Use vs. Ownership
Most businessmen agree that using someone else's equipment is the next best
thing to using their money. Why own something that depreciates and may not
serve your future needs. |
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Technological Obsolescence
A company that chooses leasing over bank financing or paying cash, can enjoy the
benefits of using the equipment without assuming the risks of either functional
or technological obsolescence. |
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No Down Payment
Leases generally only require a small advance payment or a security deposit,
unlike a bank loan which usually requires a down payment of 20% or more. |
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100% Financing
A lease transaction can include financing for all the components of the equipment
purchase, such as installation, software, freight, maintenance, training and
handling. A single lease transaction can also handle various types of equipment
and multiple vendors. |
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