Benefits Of Leasing

Leasing is a very effective tool for most organizations to acquire and manage the level of technology required to operate at peak efficiency. While providing an additional source of capital, leasing also allows businesses to match their expenditures with the useful life of the equipment.

According to the Canadian Finance and Lease Association (CFLA), there are over $100 Billion of lease contracts in place with Canadian businesses of all sizes. The reasons are varied, but some of the benefits these organizations would include:

  • Conservation of cash for other business purposes
  • Technology becomes more affordable
  • Additional flexibility to upgrade
  • Low Fixed rate payments
  • Existing debt lines are unaffected
  • An alternative source of credit
  • Deferment of Taxes over the lease term
  • Payment scheduled over the useful life of the asset
  • Off balance sheet financing effects
  • Improvement of liquidity, leverage, solvency and profitability ratios
  • Avoidance of accounting for depreciation
  • Introduction of equipment lifecycle management practices
  • Facilitates planned and orderly replacement of assets
  • Reduction in the cost and liability associated with asset disposal
  • Effective hedge against equipment obsolescence