Benefits of Leasing
Leasing conserves working capital
No large cash outlay is usually required as a “ down payment “ or security margin. Often the complete costs of training, installation, software and maintenance contracts can be included in the lease. Furthermore PST and GST are not paid in a lump sum but remitted with each lease payment.
Leasing preserves existing lines of credit
Your bank operating line of credit or cash on deposit are left unencumbered and available to support high turnover customer receivables and inventory.
Leasing expense is linked directly to revenue flow.
Leasing allows you to acquire equipment immediately and pay for it from revenue generated or savings earned by the new equipment.
Lease payment plans are flexible
Payments plans can often be customized to the unique characteristics of the business or industry. Options include accommodation for seasonal industries, deferred payment options, accelerated or stepped plans. At the end of the lease agreement a number of options are available to you.
Leasing can limit corporate or personal liability
Often only the assets acquired provide the security required by the lessor. Corporate or personal liability is usually less than that required for conventional bank loans.
Additional source of financing
When conventional credit grantors restrict the overall borrowing capacity of your business, leasing provides a new source of financing for fixed asset acquisitions.
Leasing costs are competitive with bank financing (purchasing)
The net cost of leasing is usually competitive with other forms of financing. A lease versus buy analysis will provide you with the information necessary to compare the cost of various financing options.
Leasing is a flexible financial option
Annual lines of credit can be arranged to take advantage of and quickly close advantageous equipment purchasing opportunities.
Nexus is a private, owner managed financial services company dedicated to providing advisory services, financial management services and leasing services for small to mid-size companies, primarily based in Western Canada.
There are many financial strategies business can employ today. Don’t let a shortage of capital prevent you from expanding your business without first exploring all of the options available to you.
If you want to know more about leasing and whether leasing may be the right financial tool for you, please contact our office.