Leasing may or may not fit with a company’s needs, and the first step in making this determination is to decide what equipment will need to be a long term commitment
Boston MA (PRWEB) March 27, 2013
LeaseQ, one of the leading providers of equipment leasing and financing in the United States, is offering tips to business owners and corporate professionals for determining if equipment leasing is the ideal option for their business enterprise. Leasing has become one of the newest and most affordable options for many businesses across the country, but may not be the ideal scenario in every case.
Leasing may or may not fit with a company’s needs, and the first step in making this determination is to decide what equipment will need to be a long term commitment and what will not. The pool of “must own” material is in fact, usually very small, with even major airlines leasing most of their aircraft. This saves cash and borrowing power for operational requirements.
Lease versus Purchase analysis is often used whenever considering a large leasing transaction, as it compares the after tax cost of ownership for the two alternatives and estimates the residual value required for the firm to be neutral. A number of lessor will perform this service for their clients. Lessors can often assume more residual value than that which is attainable in a purchase agreement due to the inability to acquire full value for much of the product in the equipment marketplace.
There are also a number of accounting benefits to leasing, one of which is the ability to get certain leases off the balance sheet through compliance with the FASB 13 test. Such treatment improves financial ratios, Return On Assets, etc. Leasing also tend sot avoid future accounting surprises that may result when purchased assets are sold for less than their current book or market value. Leasing high technology equipment almost always tracks with real costs and market values far better than depreciation tables.
There are also tax benefits to leasing, with new deductions for equipment allowing for as much as 100% of the equipment costs to be deducted from taxable income. The most relative benefit to leasing versus purchasing of business equipment will vary according to the depreciable life of the equipment, the lease term, payment structure, and the marginal tax rate for the company involved.
Based in Boston MA, LeaseQ is one of the leading providers of business equipment leasing options in the United States, with plans available to benefit both small businesses and Fortune 500 corporations.