Leasing Overview
A lease is a contract permitting the use of an asset for a stated period of time in return for scheduled payments. The terms of a lease give one party (the lessee) the right to use a piece of property or equipment for a stated period of time, in return for a stated periodic cost. A lease may serve to finance the acquisition of a piece of equipment (Finance Lease), or, a lease may simply provide the lessee with the use of the equipment for a stated period of time (Operating Lease).
There are numerous benefits of utilizing leasing:
- Conservation of Cash
- Improved Performance Ratios
- Longer Lease Terms
- Small Up-front Investment
- Preservation of Working Capital
- Additional Funding Source(s)
- Lease Payments may be Deductible
- Avoid Alternative Minimum Tax
- Low Technological Obsolescence Risk Factor
- Flexible Payment Structures
