Leasing is always preferred over buying. Here are some other benefits of leasing:
o Leasing is very beneficial for companies that are not able to afford business loans. In other words, leasing is an alternative to traditional financing.
o Moreover, there is no down-payment required in case of leasing. That is, leasing ensures cent percent financing.
o It ensures ease and convenience while applying and the lease arrangements are structured in such a way so as to meet individual requirements.
o Lease terms are quite flexible. Depending upon the type of the equipment, the lease term can range from 12 to 60 months. Capital budget delays are almost eliminated by allowing the payments to be made with the operating rather than the capital funds.
o One can always purchase the leased equipment later when the capital becomes available.
o One can also credit a percentage of the lease payments toward the purchase of the leased equipment.
o Lease payments are fixed and predictable. It allows the person to accurately predict the impact of equipment expenses on the cash flow.
o Leasing also helps to conserve the working capital as it requires only a minimal outlay of cash initially.
o Besides, it also offers tax advantages. Operating leases are required to be paid from pre-tax earnings and not from after-tax profits. Therefore, it is considered to be a 100 percent tax-deductible business.
o It also offers protection against inflation. Since the payments are fixed irrespective of what happens to the market tomorrow, it becomes easier to budget, forecast and grow.
Therefore, leasing is always preferred over buying.
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