What Is Leasing
An equipment lease is a contractual agreement permitting a firm or individual (the Lessee) the right to use a piece of machinery or equipment owned by another party (the Lessor) for a fixed period of time. The Lessee pays rental charges to the owner of the asset in exchange for this right. The Lessee substitutes the cost of the rental payments for the depreciation, interest expenses, and other charges normally associated with ownership of the asset.
Individuals, professionals, government agencies, organizations and businesses of every size lease. Anyone with an ongoing requirement for capital equipment may be a potential candidate for leasing. Virtually anything can be leased although firms tend to lease assets that provide either a production or support function for their venture. Leasing is especially practical when the asset will provide a financial benefit to the enterprise, either through increased efficiencies and reduced expenses, or the generation of additional sources of revenue.
Examples of goods commonly leased include office equipment, computers, construction and manufacturing equipment, industrial equipment and tools, and vehicles of every description.
Organizations and individuals may choose to lease for a wide variety of reasons. They may find that the after-tax cost of leasing is equal to or less than the cost of owning the equipment. The lessee may find that leasing is easier on their cash flow, spreading all of the associated costs of acquisition over time, or that the lease will convert an asset purchase to an expense, which can then be more easily allocated to a specific department or stream of revenue. Some lessees value the convenience and service a lessor can provide compared to traditional lenders, as well as the assistance ans support in selecting sophisticated equipment or negotiating a favorable price from the vendor.
Leasing is a form of financing which has grown in appeal over time. A well-established global industry has evolved and is expanding rapidly. Leasing makes productivity-enhancing equipment more accessible to many firms and in doing so has a substantial impact on the economy. The industry brings together technological, capital and human resources to create a more productive environment. An organization should always consider leasing as a possible alternative to using its cash or other forms of financing when acquiring new capital assets.
Westport Leasing Corporation
11198 - 84th Avenue Box 33026
Delta, B.C. CANADA V4C 2L7
Phone: (604) 681-1260 | Toll Free: 1 (800) 667-0747
Fax: (604) 681-1680 | Toll Free Fax: 1 (800) 667-4426