Finance
Why should I rent rather than buy?
Renting allows you to have immediate use of the goods without the capital budget.
How many times have you had to lower your expectations because of capital budget restrictions or timing? Why not benefit from the right equipment right now?
Fully tax deductible rentals work because outgoings become an expense, not the purchase of an asset.
The most important benefit of rentals (operating leases) is the effect they have on financial ratios. Off-balance-sheet financing lowers the debt to equity ratio, raises the current ratio (liquidity), and increases return on assets (ROA). Improved ratios may help an organization obtain additional traditional financing, providing more capital for growth and profit-generating activities. Renting can help improve financial ratios which are often used to measure the performance of organizations and their management.
Reduced administration costs. There is no need to maintain depreciation and interest schedules.
Leasing brings financial peace of mind because you'll know at the outset exactly what your payments will be for the duration of your lease. Payments are determined at a fixed amount, payable monthly. Once established, they remain at that amount for the term of the rental, no matter what market interest rates do.
Utilise your cash for other more strategic areas of your business.
Your initial cash outlay is only the first month’s rental in advance. Your money is retained for more profitable uses such as marketing, additional staff and increasing production capabilities.
Stay on the edge. Avoid buying depreciating "assets". Purchasing often leads to keeping equipment far beyond its useful life.
By leasing rather than buying capital assets, especially technology and communications equipment, you'll reduce the possible risk of technological obsolescence. You can decide to upgrade at any time, not when your accountant tells you its fully depreciated.