The Customer Benefits of Leasing

Leasing Equipment vs Buying – Customer Benefits

Ever considered the customer benefits of leasing? Here’s why it could be better for your business to lease the equipment rather than buy it. Below are 8 key benefits why your business should consider leasing when making your next purchasing decision.

1. Preserve cash flow

This is the key benefit to why most companies lease. You keep your cash or bank overdraft facility for the working capital requirements of your business.

2. Pay for the equipment as you use it

Would you give a new employee three years salary in advance, probably not. Therefore, why would you pay for their laptop, mobile phone, desk or car upfront.

3. No need to pay the VAT up front

With a lease rental agreement, you pay the VAT when the rental is due. There is no need to pay all the VAT upfront. (With lease purchase / HP lease agreements, all the VAT is paid up front).

4. A new source of funding

Leasing companies are often a new source of funding for a company. You do not have to use existing finance contacts.

5. Tax benefits

Many leasing companies will tell you there are tax advantages as all the rental repayments are allowable against tax. With the new £1m AIA limit coming into effect in January 2019, for the vast majority of SME companies, there are no real tax benefits to a lease rental agreement. Lease purchase agreements may be a better option.

6. The benefit of easier budgeting

Paying a monthly rental makes budgeting an easy process. The rental will cover the cost of the interest and the asset depreciation.

7. Using a revenue budget as opposed to a capital budget

Larger companies often have strict capital and revenue budgets. Rental repayments come under a revenue budget, hence no need to get capital budget approval.

8. Avoids obsolescence

With equipment leasing, the rental term is normally the same as the equipment life. Many companies will lease equipment then just upgrade it at the end of the lease term.

Contact Us

If you would like any more information on the customer benefits of leasing and what we can provide finance for here at WestWon, then please don’t hesitate to get in touch with us. Either give us a call on 01494 611 456 or alternatively email us on hello@westwon.co.uk. You can also see more over on our LinkedIn page.