Lease vs Loan vs Buy

Quick facts regarding your financing options

LEASE Advantages

• Depreciation write-off or fully expensible payments
• 100% financing and conserves capital.  Terms available from 12 to 72 months!
• No financial information typically required (under $75,000)
• Preserves bank lines for unanticipated needs
• Always fixed payments and allowance for early payoff w/o penalty
• Easy add-ons, trade-ups, and flexible billing
• Simple credit criteria based on time in business
• Lease does not reflect on a personal credit report
• Competitive pricing and FAST TURNAROUND (usually same day)

LEASE Disadvantages

• Not favorable for new business unless properly structured

BANK LOAN Advantages

• Direct ownership and depreciation write-off
• Appropriate when bank lines are rarely utilized
• Excellent for short term borrowing (12 months or less)

BANK LOAN Disadvantages

• Payments may be variable, and terms restricted
• Covenant restriction; may encumber other assets
• Exhausts credit lines and payments may not be fixed for term
• May require:  compensating bank accounts, down payments
• Training, insallation, freight, software (typically not financed)
• Financial condition may hinder ability to borrow or renew lines

CASH PURCHASE Advantages

• No finance charges
• Direct Ownership
• Depreciation write-off

CASH PURCHASE Disadvantages

• Attacks cash reserves
• Reduces investment leverage AND compound interest
• No hedge against inflation
• MOST EXPENSIVE after tax option