Purchasing assets require large funds commitment. Finance lease, an alternative to purchasing an asset, allows you the use of an asset while paying a rental rather than a repayment. You can enjoy the same freedom and flexibility of a cash buyer without the headache and financial pressures associated with heavy initial outlays. You can get office equipments as well plant and machinery without any capital outlay.

Although ownership of the asset never passes to you, at the end of the rental term you will receive a proportion of the proceeds from the asset’s sale or have the choice of extending the lease as a secondary rental. By spreading your payments over the lifecycle of the asset, you are able to align the equipment cost with the benefit derived from that investment.

Finance lease is especially advantageous for companies who plan to keep their equipment at the end of the lease term. In a finance lease, the asset generally appears on your balance sheet and is amortized over the life of the lease. Opting for finance lease you can avoid large up-front payment. Finance lease improves your cash flow and liquidity. It provides flexibility in cash flow operations.

Under a finance lease or purchase you will be entitled to depreciation deductions based upon the capitalized cost of the property. The lease rentals paid by company are tax deductible and this way tax burden can be reduced. If you are VAT registered then pay VAT on each rental and it is normally recoverable. Using option of finance lease you can keep your business up-to-date with the latest technology and most efficient plant and equipment.

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