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Lease - Advantages & Disadvantages

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What are the key advantages and disadvantages of leasing from the point of view of the leasing company?

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730 words; 2 references; advantages and disadvantages of leasing from the point of view of the leasing company

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According to Bizhelp24.com, the following are the advantages and disadvantages of leasing:

Advantages:
1. No large cash outlay: Leasing equipment or property entails that the company pays only for the cost that is spread during the leasing period and the business can keep its cash for operating expenses instead of paying for the equipment upfront. Businesses need to maintain cash flow that is need for the business to keep the business going. Most small businesses have a hard time keeping their cash under control so they fail.

2. No need for security: The leasing company owns the product, not the business. This means that there is no need to have any further security in terms of having the product and to start a leasing contract. It will be easier for the business to pass the credit check.

3. Tax benefits: Some lease rentals can be considered as an operating cost and it can be considered as a trading expense that is deductible from taxable profits. However, the leasing company must make sure that the equipment it is leasing is eligible for that before it agrees to a ...

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