Finance leases are ideal for equipment that quickly loses it’s value or is likely to become obsolete (such as IT). Payments are spread across a fixed term and you then have a choice about whether to keep your equipment, sell it, or upgrade to the latest gear and continue leasing.
From a cash-flow perspective leasing is an attractive option however you will pay more than if were to purchase outright. Leasing is also beneficial from a budgetary point of view and allows greater flexibility when the finance terms ends.
Although you don’t own the equipment, you are responsible for maintaining and insuring it.
You must show the leased asset on your balance sheet as a capital item, or an item that has been bought by the company.
With a finance lease the equipment is considered an asset on your balance sheet, and you get the benefits such as tax depreciation and risks, including obsolescence, of ownership.
With an operating lease , the leasing company retains ownership, and for tax purposes, the equipment is considered a monthly operating expense rather than a depreciable asset. Operating leases are usually short-term–three years or less.
If you are considering operating leasing, remember the following points:
We understand that different business have different needs. Technological needs change over time. Wherever your business is at, we can provide a technology solution to meet your needs.