Leasing has many advantages versus a cash sale or bank loan!
| Cash Sale | Lease | Bank Loan | |
| DownPayments | You must pay the full cost of the equipment at time of purchase. | Low down payment even an option for zero down when you lease the equipment. | Banks usually require a down payment between 5-25% of the equipmentcost. |
| Flexibility ofFinancing | Prohibits you from adding more equipment/services based on the large upfront cost. | Flexible financing options Low Down Payment. Monthly payment remains constantthrough a lease. | Monthly loan payment can be variable - itmay increase or decrease periodically. |
| Effect onbank/creditlines | Depletes your bank account of income-earning funds | Bank line of credit is not affected and lease company can be utilizedas a second source. | Bank lines of credit/loans may be tied up and unavailable for future loans/leases.Bank also could place an all asset lien. |
| Balance SheetImplications | Decrease in cash flow immediately. | Leased equipment is considered an‘expense’ on operating leases. Such assetsdo not appear on balance sheets whichimproves financial ratios. | Banks require owned equipment to appear as an asset on budget sheets which will affect your line of credit. |
| CreditApproval | Not applicable in a cash sale. | Typical turnaround time for a creditapproval is under 2 hours. | A bank usually cannot offer turnaroundtime in hours as most banks take days oreven weeks to approve a loan. |
| Upgrade orAddingEquipment | Large, upfront purchase reduces the possibility of spending more on options or future purchases. | With a lease you can afford more equipment and options without the large upfront budget cost. Allows you to roll in additional services. | Most banks also willnot allow you to roll in additional services(i.e. maintenance, air time, monitoring) |