Leasing provides the business with the option to use the equipment today for carrying out the business activities efficiently and also provides the business with the flexibility of employing the funds in other productive activities.
A loan would be a good choice if there is any kind of shortage of cash but when one requires the item but cannot afford to pay the high rate of interest on a loan, the leasing services step in to provide the right solution.
Leasing services help you by letting you postpone a huge payment that would be otherwise be required for purchasing the product.
Leasing services enable one to pay a small affordable amount as the payment for lease and let you exercise the option of either buying the product at the end of or on completion of the lease. The payment on a lease is lower than that of a loan and thus, helps you out financially.
Purchasing or taking out a loan for the purchase is advantageous in a way that it lets you have ownership of the product. But, on the other hand, a leasing service for equipment lease would be beneficial because for a low payment the use of the equipment is possible and after the period of lease is over you have the option to either purchase the equipment or not (can decide not to purchase in case the equipment becomes outdated by then).
Leasing services thus, provide tremendous flexibility for both an individual as well as a business.
For understanding leasing services better it is important to know the parties to a lease and the duration for which a lease agreement is available. The parties involved in a lease agreement include the lessor and the lessee. Leases may be broadly classified into finance leases and true leases. Finance leases are ideal when your intention at the end of the lease period is to buy the equipment, you can then purchase the equipment at a very nominal value.
The payments in case of a finance lease are higher as compared to a true lease. A true lease would fit a case wherein you want to use the product during the lease period and would not be keen to buy it at the end of the lease. Payments on a True lease can be fully claimed for the purpose of taxation and is thus, beneficial for the business.
Today, fast changing economic scenario, many companies are deciding to go in for a leasing option as against actually purchasing the product or equipment.
Leasing services provide great flexibility in terms of payment and it is possible to make payment on the lease based on your company’s earnings. You may consider repayment structures like skip lease plans or deferred plans that allow you some relief in repayment without charging any kind of penalty on it.
Leases are generally of periods from 6 months extending to 120 months at the end of which you can either purchase the equipment or decide to end the lease or maybe even renew the lease.
There are several leasing companies operating efficiently and providing high quality leasing services. After you have decided on the equipment then the next step would be to find a good deal that would be just right for you. In order to strike the best deal it is advisable to conduct a proper survey and compare the rates and terms and conditions offered by each of the companies.
Only after a complete analysis is done and you are fully satisfied as regards the offer and the credentials of the company should you sign on the dotted line.
With the rapid development of the global economy and the need for capital goods rising, leasing services are definitely here to stay as they provide the businesses with a cheaper and more productive option that they can capitalize on and reap rich dividends.