- Most lessors agree to 100 percent financing, which leaves your working capital and lines of credit free.
- Easy acceptance with quicker and more liberal credit approval and less paperwork than applying for a bank loan.
- Equipment upgrades, usually at no extra cost.
- Reduced risk of technological obsolescence.
- Major tax benefits because most lease payments may be counted as operating expenses and deducted as such each month throughout the tax year instead of annually.
- No down payment or collateral required.
- No variable interest rates that are affected by the fluctuations of the market.
- Some lessors permit flexible payment schedules if your business is seasonal.
- An option to buy at the end of a lease gives you the opportunity to decide whether your business strategy still requires the same equipment or whether you should move on to other merchandise.
- Unless you sign a finance lease (see the "What's Your Type?" section above), your lease payments are not listed as a liability on your balance sheet, so your financial picture looks brighter.
- You do not own the equipment and cannot sell it unless you opt for a buyout.
- A long-term lease can lock you into equipment you no longer need.
- You may prefer to consolidate with a single bank loan to cover all your office expenses instead of several different payment plans.
- There may be penalties for terminating a lease.
- Leasing debts can stress some people out; after all, you're borrowing money.
- If service is poor, you have little recourse.
- Equipment insurance is usually not included.
Next: A Tale Of Two Leases »