Great article, but since most people can't calculate interest payments they don't know on many leases you are paying 25%. In business it is hard to make money when you are paying 25% on the capital required to make money. Likewise, the tax implications are HUGE, so your accountant should probably be a big part of the decision - again, as most don't know how it will affect the taxes - and therefore bottom line profit.
Either a lease or purchase could be more expensive day-to-day, but might be more profitable after tax considerations are made. If one doesn't know, one should realize this and ask someone who does.
ON the subject of LEASING, leasing is NOT directly a source of capital.
Leasing is a way to reduce the capital required to finance your business.
ADVANTAGES OF LEASING
Frees up working capital
Provides a new capital source
Provides fixed rate financing
Does NOT disturb present bank credit lines
May not show on the Balance Sheet
May be a hedge against obsolescence
A new article has been posted on Four Decisions to Make Before Leasing Equipment. I know that I personally prefer to own something outright over leasing, but this article provides some good tips that make leasing a more attractive option then before. Take a look and tell me what you think. How often do you lease equipment for your business? What type of lease do you generally get?