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Why Us - Benefits of Leasing

A recent Commerce Department study indicated that 80% of all U.S. Corporations now lease some or all of their equipment. These businesses realize that the value of equipment to a business is its usage, not the ownership. Our knowledgeable leasing professionals are experts in designing leases that provide you with the maximum benefits of usage at the lowest possible cost. In addition, leasing provides many other benefits that neither traditional bank financing nor cash can provide. Some of these benefits are:

Reduce Obsolescence Risk
The technological obsolescence risk of equipment ownership may be transferred to a lessor under an operation lease. This is especially important with high tech assets, which tend to rapidly become obsolete. By reducing company’s investment in the equipment through an operating lease, the company’s exposure to deteriorating asset values can be more effectively managed.

Avoid Unwanted Write-Offs
Leasing eliminates unplanned write offs caused by “stranded assets”. Stranded assets are those assets that are no longer productive, yet whose book value exceeds their fair market value. Consequently, the asset’s displacement results in an undesirable financial write-off. This is particularly common with high tech assets where depreciation schedules often fail to keep up with the assets’ devaluation.

Off Balance Sheet Financing
FASB 13 qualified operating leases do not appear on a company’s balance sheet. The lease rental is simply expensed on the company’s income statement. This results in stronger financial statement presentation, assistance in loan covenant compliance and improvement in common financial statements ratios. Furthermore, leasing can result in a lower P & L expense thus increasing a company’s earnings.

Additional Credit Source
Leasing provides the opportunity to preserve cash and existing credit facilities so they may be utilized for more appropriate purposes. In addition, leases typically do not impose the restrictions or fees usually associated with bank financing (covenants, compensating balance charges, non-utilization fees, etc.)

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