Why It Makes Sense To Lease
Saves Working Capital
If you buy the equipment outright the capital invested, in effect, becomes tied up in a depreciating asset. This means it cannot be used for other projects. Leasing equipment allows you to save resources for other purposes such as new business opportunities, responding to unexpected problems, or investment in product development or marketing.
Payments made throughout your lease arrangement are not affected by changes in interest rates. So, unlike a bank loan or overdraft, you can accurately plan for lease payments in advance. This helps simplify the budgeting process.
If you pay corporation tax, leasing can be particularly attractive. Leasing payments may be deducted from taxable profits, which reduces the net cost of leasing the equipment.
Leasing allows your business to keep up with changes in technology and respond to any industry or competitive pressures. Your original installation can be altered, either during or at the end of the lease, to accommodate unforeseen changes.
A deposit need not be a prerequisite to the leasing arrangement. You simply make regular payments throughout the life of the agreement.
Future Credit Line
If you lease the equipment then existing credit lines, such as arrangements with the bank, remain intact. This gives you the additional flexibility to use these arrangements if necessary in the future.
When you lease, you make a series of regular (usually quarterly) payments instead of a large capital outlay. Leasing payments are usually spread over a period of 3 to 5 years.
Calderbrook WWM Finance and Leasing
Calderbrook WWM Ltd are able to offer a number of payment options to customers. If you are looking to finance your next refit or upgrade using cash or a credit card, think again.
The advantages of leasing with Calderbrook WWM:
- Leasing payments are rental payments and therefore are an allowable business expense. If a business is making profits they reduce the profit by the amount of the rentals you pay each year which in turn reduces your tax bill.
- Lease payments do not change during the lease period. An increase in interest rates do not affect you and enables you to budget your cash flow more effectively.
- Leasing enables you to save your cash for other purchases such as new stock, staff training, advertising and new business opportunities.
Do my payments increase if inflation or interest rates rise?
No. Each monthly payment is fixed, therefore is unaffected by interest rate rises. This enables you to budget your cash flow more accurately.
As inflation rises, because your payments are fixed the cost of the equipment reduces in real terms. Is there a tax benefit associated with leasing?
A business wishing to acquire capital equipment has to seek the most tax efficient way when doing this. All lease payments are treated as an allowable business expense and therefore attract tax relief for the full duration of the lease agreement. Your accountant will be able to confirm this.
All payments are made by Direct Debit on the same date each month. Other options are available.
Nearly every market sector large or small benefits from leasing, from new start business to large established companies.
How does a lease work?
A lease agreement is a contract between you the customer and a leasing company. This enables you to use equipment over a period of time on payment of rentals to the leasing company. With a typical lease agreement, you make a series of regular payments (usually on a monthly basis), thus helping cash flow, as opposed to a large capital outlay for the equipment.
Have the best equipment
You only pay a small deposit with a lease agreement. This enables you to choose the best equipment available with only a small initial cash outlay.
Try our Leasing calculator