Thread: Lease info

It costs a lot of money and if times get hard you're stuck with repayments that might be difficult to meet.



Cheers
Simon

Are we talking leasing a vehicle or some kind of equipment...is it for business or personal use? Generally if you are looking from a business perspective, there is an old saying...if it appreciates...buy it...if it depreciates....finance it. Reason being is that capital it better utilised to generate income, not purchase depreciating assets. With funding it via finance for business purposes there are tax advantages to do so...not as much with cash purchases. This is what I do for a living, so any other questions...please ask or feel free to PM me,

Regards

Stevo

Thanks guys.

Its plant equipment for business purposes. Are lease payments generally higher than loan repayments?

With the tax/financial benefits so great with leasing, why do some still get bank loans? Is it them purely make a not so good choice?

Hi Aaron,

Generally most plant and equipment is funded under either a lease/rental/chattel or CHP arrangement, dependant on the type of equipment being purchased. The only other types of funding arrangements that may present themselves would be an OD facility, line of credit or some other form of capital funding. When you say bank loans, bank loans for what? An individual may get a personal loan to purchase a car or a mortgage to buy a house, a business may get a capital loan if they were manufacturing a product,

Regards

Stevo

Ill shoot you a pm shortly :-)

Find a finance broker or lender who is interested in keeping you as a customer, not just getting his one off commission for jacking you into a lease. Your entire financial position should be taken into account. You may well be better off with some other form of borrowing, assuming you need to borrow. Many small business people have a horror of paying tax (they have already spent the tax liability) and are attracted to leasing because of leasings tax deductability. HP, overdraft, personal loan, or cash payment may be more financially rewarding in the long term. Get a good accountant and a good money lender. Of course, if you have no folding up front and have to run your small business off dodgy cash flow then you may need to use leasing and multiple mortgages over the family home. In that case, see you in the dole queue.