January 9, 2018

Why Lease instead of Credit or Cash?

Why should you consider a lease for your next equipment purchase?  It’s simple enough, when you buy something with the cash you have in your bank account, you win (sort of). But realistically you, like most people, rarely pay cash for a large purchase.  Even if you have the resources to do so.  Why?  You realize that you might have an emergency.  You realize that it’s easier on you to know that you have a pillow available for strategic investment.

Can you justify a lease? When you lease something, you can immediately reduce your tax load.  Versus when you buy a typical asset with cash you need to amortize it over a period, which can easily be as long as 8 years.  Either way you benefit from the tax viewpoint.  But which one rewards you more quickly and keeps cash in your account where it belongs?  An asset becomes no tax burden in as little as 24 months.  Obviously leasing allows this to happen.  For a deeper explanation ask us to put it on paper for you with your strategic purchase.  You might be shocked.

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