Why Lease Instead of Buying Outright?

Leasing lets a company operate within a strict budget while focusing on effective ways to market its product or service and attract repeat business. By leasing assets instead of buying them, a company preserves its capital so it can increase inventory, decrease debt, expand to new locations-whatever it takes to meet and beat the competition.

With a custom-tailored lease-financing program, a company can achieve several benefits over paying with cash:

		Equipment and technology-based systems are kept up-to-date through a carefully conceived acquisition and replacement plan.
		Choices in equipment and technology are more numerous when leasing because your decisions are not limited by how much cash is on hand.
		Lease payments from an operating budget are often a more viable alternative when there's little or no money in a capital budget to buy an asset with cash.

Through a lease structured by Vendor Finance Group, a company can also refresh its equipment as needed and keep up with the newest technologies on the market. Periodically replacing and updating equipment brings several benefits:

		Continuing use of state-of-the-art operating systems
		Reducing repair and maintenance costs
		Increasing efficiency levels

The Superiority of Leasing as a Financing Strategy

A company generally has three options in financing capital assets:

Leasing

Leasing may be the best long-term financing solution. By leasing, instead of paying cash up front, a company can free-up its capital for other purposes. For example, a company may need databases and high-speed on-line connections to manage information files on customer preferences, monitor the competition and emerging markets, and communicate with customers in an instant. Perhaps attractive new furnishings and functional equipment are required. All of this takes capital...and more of it will be affordable if lease financing is utilized.

There may also be reductions in repair and maintenance expenses that come with newer equipment, plus the operational efficiencies that accrue when technology resources are acquired through a planned, rather than haphazard, program.

Leasing may also reward you with:

		Off-balance sheet financing
		Payment amounts that are determined up front
		Fully expensed lease payments
		Potential tax benefits
		Seasonal payment structures
		Fixed-rate financing

Use our lease calculator to easily determine how affordable leasing can be.
For requirements over $100,000, please call us at 1-800-496-4640 ext. 512.

Bank Financing

Bank financing preserves capital at the outset. But a company is still subject to the risk of technology and equipment obsolescence that comes with ownership-plus a mountain of paperwork. Banks may also impose additional requirements or other covenants that narrow a company's financial options.

Banks may be limited in what they can offer a company in the way of leasing if a company already has additional credit lines with them. Moreover, banks often require compensating balances, availability charges, non-usage fees, lien search fees and documentation fees.

On the practical side, banks can't help a company when it runs into technological obsolescence, nor will they take existing equipment off your hands when you decide to upgrade. For a company to grow and prosper, it can't afford to be stuck with older equipment and technology. To maintain that competitive edge, a company needs the best that's available.

Finally, consider that banks also shy away from some of the most important investments like licensed software, installation, training, maintenance and other "soft" costs.

Paying Cash

Paying cash depletes a company's precious capital reserves, preventing it from allocating them to more important uses. And by paying cash in full at the outset, a company can only depreciate and write off a small percentage of the original cost each year. With something that changes as quickly as computer technology, a company may be saddled with outdated high technology assets before they're fully depreciated, potentially resulting in a book loss and a negative impact on profits.