The agreement of lease sometimes demands early deposits.The organization cannot claim capital allowances like depreciation and other costs.Sometimes the present value of outflow can be more than the asset’s value.Tax benefits will be more in the case of equipment leasing as lease rent is allowed as an expense in the profit and loss account.It reduces the blockage of money in the assets, allowing investors to earn the maximum returns.With Equipment Leasing, the organization can shift to advanced technology equipment easily. As the leading payment involves monthly payments in small portions, it does not create a problem in case of a cash shortage.The advantages of Equipment Leasing are as under: In the case of equipment leasing, there is a lease agreement that governs the terms of Leasing, whereas, in the case of finance, there is a loan agreement that governs the rules of financing.In equipment leasing, the ownership is not transferred to the lessee, whereas in finance, the ownership is transferred to the borrower.The cost of equipment leasing is lower than the cost of finance.It refers to taking the equipment on Leasing, which may be for the long term, whereas finance refers to borrowing the money to purchase equipment.The demand for Equipment leasing is high in the market. So leased equipment is an advanced concept and helps the business organization utilize the resources effectively.
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