Equipment Leasing
Compared to Loans

Equipment Leasing Compared to Loans

Benefits of Equipment Leasing

Equipment lease financing, as opposed to purchase financing, is gaining more and more popularity due to its many advantages. Among these advantages are:

  • Frees up Capital

  • Hedge Against Inflation

  • Potential Tax Advantages - Lease payments, in many cases, are 100% tax deductible. Bank-financed equipment must be depreciated over a longer period of years, and only the interest portion of the payment is deductible. The after-tax cost of equipment is typically lower through leasing than any other means of acquisition.

  • Easy Add ons and Trade Ups - At the end of the lease, you have the option to return the equipment if you no longer need it or want to upgrade it. This way, you are not stuck with obsolete equipment and are free to upgrade and re-evaluate where your monthly dollars may be best spent.

  • Preserves Credit lines - Keep available outside credit lines.

  • Fixed Payments

  • No Down Payment With leasing, there is typically no down payment required. You can finance 100% of the cost; in fact, you can finance more than the cost of the equipment. Additional expenses such as taxes, installation, delivery, and maintenance can usually be added to the lease.

  • No Additional Collateral

  • Easier Budgeting

Equiptment being Purchased by Loan

  • Reduces Available Credit Line

  • Extensive Documentation

  • Extensive Monthly Reporting

  • Often Requires additional Collateral

  • Often Require s Down Payment

  • Not Flexible

  • Negative Impact on Balance Sheet

  • Bank Loans can be Canceled by Lender at anytime

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