Philosophy of "Leasing"
The Philosophy of Leasing: It is not the ownership, but the use of equipment that makes you a profit.
The name of the game is to make a profit. Owning obsolete equipment doesnt impress anyone. Obsolete equipment is not an asset. Obtaining "use" with little cash expended...having modern, efficient tools and facilities will make you more competitive and attract more business and activity.
Leasing may also have tax benefits, including a "faster write-off"...and can also give you (especially at the end of the year with one payment) a $18,000 depreciation deduction with a completed lease. An operating lease does not have to appear on your asset-liability balance sheet. And there are other advantages (see Why Lease).
The basic philosophy is the proper use of money; leverage: putting cash into things that make a profit such as advertising, inventory, employees, new markets, research and development, faster producing assets rather than ones that "depreciate" and at best, become "obsolete."
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