Credit Corporation is indeed one of the leading companies, when it comes to offering high-quality services at affordable prices.

There are plenty of advantages of lease financing, and here are the primary ones:

Advantages of Financial Leasing

Financial leasing is becoming the solution in resolving the fixed asset needs vs its purchase. It is a system between the owner and user of any asset, where the lessor buys it from the lessee and uses it to return periodic payments.

The advantages of financial leasing are as follows:

1. Balanced Outflow of Cash

Any payments or cash outflow relating to leasing are spread over many years. Thus, it saves the burden of onetime cash payment, which helps a business maintain a stable cash flow profile.

2. Tax Benefits

Leasing expenses are regarded as operating expenses. Thus, they are tax-deductible. One can choose to expend the payment than to capitalize and depreciate it.

3. Quality Assets

When leasing one asset, the ownership of that asset lies still with the lessor, and the lessee has to pay its rental expenses. So, it becomes feasible for the business to invest in good quality assets that may seem expensive or unaffordable otherwise.

4. Fixed Interest Rates

One would not need to worry about the interest rate as the fixed interest rate makes the instalments transparent and easier.

5. Off-Balance Sheet’s Liability

Leasing is considered as an off-balance sheet debt, so it does not come under a company’s balance sheet.

6. Steer Clear of Technological obsolescence

Equipment can be put on a lease, which needs to be replaced in the foreseeable future.

7. Better Usage of Capital

When a company opts for leasing over-investment in an asset through purchasing, it gives out capital for the business for funding its additional capital needs or for saving money for a better decision regarding capital investment. Lease financing helps to use the funds for other purposes, such as investments, procurement of inventory, improvements and preserving the line of credit from banks.

8. Low Capital Expenditure

Leasing is a good option for new set-up companies as it incurs less initial cost and lesser CapEx needs. Nowadays, people get numerous flexible options that one can choose from according to their financial condition, making it easier for them to fund the contract signing.

9. Swift Turnaround Time

Acquisitions for equipment or vehicles become a lot more flexible and quicker with lease financing.

10. Termination Rights

At the closure of the leasing period, the lessee has the right to buy that property and end the leasing contract, which may provide flexibility to the business.

11. Self-sustaining Instrument

Lease financing would generate income which in turn could be used to clear the future lease payments.

12. Better Planning

Lease payments generally remain persistent over an asset’s life or grow consistently with inflation—this help to plan cash outflow while undertaking any budgetary exercise.

13. Lower Installments

Another great thing about lease financing is that it allows people to pay for the portion they use, resulting in lower monthly installments.

14. Corporate Growth is assisted

Lease financing helps build references regarding trade and also perceive people who are potential allies.

15. No-Risk of Obsolescence

Leasing gives a good return and saves any company from any investment risk in a technology that may become outdated soon.

To take the best decision for a business, it is necessary to know the different types of lease finance and compare them with other types of finances.

Contact: If you want to get in touch with the company, then you can at:
Website: https://www.creditcorporation.com.pg
Email Id: [email protected]
Contact No: 675 321 7066