Lease vs purchase

1. Match the timing of costs to benefits. Tailor your payments to your specific cash flow or budgetary requirements. Options such as payment deferrals allow you to defer payments for equipment until it generates a return. Payments may be monthly, quarterly, semi-annually, annually, in advance or arrears.

2. Protect against obsolescence. Flexible mid-lease and end-of-lease options make it easier to upgrade your equipment and help ensure you stay abreast of changing technologies.

3. Spread lower monthly repayments. With our competitive rates and monthly repayments, costs can be spread over the lifetime of the lease to balance payments with benefits. And where tax benefits flow to us, we pass these on in the form of lower interest rates because we can depreciate the equipment.

4. Hedge against inflation. Unlike other expenses such as salaries and utilities, lease payments are fixed and do not increase over time. This allows more accurate profit and cash flow planning and protects you against inflation.

5. Conserve cash. Leasing offers 100% no deposit financing, no up-front establishment fees and no down payment requirements. This means you can conserve your working capital for investment in your business, rather than in the infrastructure required to run it. Should you have surplus cash at some time though, the flexibility of leasing may enable you to prepay commitments.

6. Preserve credit lines. Leasing provides you with an additional source of funding, allowing you to reserve existing credit lines for other investment opportunities.

7. Obtain off-balance sheet funding. For leases that qualify under approved accounting standards as operating leases, future rentals are not included in the balanced sheet as a liability and the leased equipment is not included as an asset. This may increase your borrowing capacity and improve key financial ratios such as debt/equity and return on assets.

8. Reduce Total Cost of Ownership (TCO). For the average client-server system, industry sources estimate that the total ownership costs have tripled over the past ten years. Leasing helps control these costs that contribute to TCO. Costs such as acquisition, implementation, training, maintenance, change and problem management, and asset management.

By negotiating with hardware, software and service providers to package a total offering, leasing and financing can be used to fund a majority of factors that contribute to TCO.