Leasing is great but why not buy it through a loan? simular if not cheaper repayments.
Derek you paid yours cash because you have just started up (And I would have in the same position)after a while in business you tend to keep your own money and pay a loan from business expenses.
Shaun
Shaun
Leasing keeps liabilities off-balance-sheet and therefore help keep lines of finance open. Although to most cc's there is probably not that much difference.
Re paying in cash. There can be tax advantages in taking finance as opposed to paying cash, but the differences only really become obvious once you are in the to the hundreds of thousands.
The reason most established cc's will take finance is because they have a proven track record of generating profits which will repay a liability month on month. Most will not have put money aside each month to pay outright for new equipment on top of their existing commitments whereas a newbie doesn't have a track record and has to rely on a cash lump sum up front. In effect a barrier to entry to the industry which can often be overcome by borrowing from friends and family if they don't have access to the money themselves. It often means they are under capitalised and hence struggle from day one.
And for those who do take finance they need to be aware that some finance agreements come with a balloon repayment and they should be putting money aside each month over-and-above the actual liability repayment to meet the balloon repayment at the end of the finance agreement.
Hope this helps-I'm not specifically disagreeing with you, just refining the point you were trying to make.
