It’s the use of your software that enables you to make money, not its ownership
Leasing is often perceived to be an expensive alternative to the more traditional cash purchase, reserved simply for those who can’t afford to buy outright. However, it’s estimated that more than 8 out of 10 Times Top 100 companies and Accountancy Practices in the UK use leasing to acquire equipment. There are a number of key benefits, and as such, a variety of reasons as to why companies of all sizes, from New Starts to PLC’s and Government Departments, choose to lease. They are:-
Acquire the latest technology…….now
Leasing allows you obtain the technology that you need immediately, write off the costs of the software as you use it, and to easily trade up to new technology as and when you need to.
All rental payments are 100% tax deductible. The equipment is owned by the finance company and so the rentals that you pay are simply classed as a business expense.
Lease rentals are fixed, so the amount you pay will remain the same, making for simple budgeting.
Preserve Cash Flow
Spreading the cost benefits your cash flow instantly, leaving more cash in the bank ready for use when it may be needed more.
Total Solution Finance
The lease can cover many other elements than just physical software, including consultancy, training, installation and support. Your total solution could be covered by just one simple regular payment.
Very often, you will be able to upgrade your software in the future without increasing your rental payments. A lease contract thus protects you from the burden of owning outdated systems.
Overdrafts can be reduced or called in. As long as the rentals are being paid, your lease facility cannot be withdrawn.
Avoid Bank Restrictions
Bank restrictions can include blanket liens, restrictive covenants, “call anytime” provisions or compensating balance requirements. A lease, on the other hand, has none of these.
Alternative Funding Source
When you use leasing to acquire your equipment, your other lines of credit, such as loans or overdraft facilities, are unaffected. Having an available line of credit with your bank is invaluable asset that is best left intact to address any future unforeseen requirements.