Why Lease instead of Buy?
Just as employees are not paid years in advance, neither should equipment. Equipment is a revenue-generating asset and should be paid for out of the revenue it generates.

A quick overview of an Operating Lease
- Allows you to have immediate use of the asset without ownership
- Predetermined operating cost
- Avoids the risks associated with asset ownership
- Fully tax deductible rentals

Features
Enables a smooth monthly cashflow and more accurate budgeting
Reduced administration costs as there is no need to maintain depreciation schedules
Interest rate is fixed for the term of the lease

Benefits
Cash reserves can be used for more profitable areas of the business
No capital outlay
Ability to upgrade regularly with replacements keeping up with the latest models
Avoid equipment obsolescence associated with purchasing

Why Lease instead of Buying Equipment?
Consider the pace of technological change: it doesn't make sense to invest large amounts of money in capital equipment. Equipment is a revenue-generating asset and should be paid for out of the revenue it generates. Just as employees are not paid years in advance, neither should equipment. Sinking large sums of money into equipment every couple of years is unproductive when that equipment becomes obsolete before you even finish paying for it. That money could be used for other opportunities.
Leasing lets you get more equipment at a lower up-front cost. Many businesses attempt to put a system together piece by piece as cash flow allows. This approach delays productivity. Leasing enables a company to get all the equipment it needs under one manageable monthly payment.

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Whether you are a small business, a government department, a school or large corporation there is a benefit for your organisation:

1. Equipment leasing conserves working capital.
If it appreciates, buy it. If it depreciates, lease it. One primary reason most businesses lease is to conserve cash so they can invest it elsewhere in their business rather than in assets that depreciate.
Traditional bank lines are perfect for running the day-to-day operations of a business but not for funding long-term equipment acquisitions. Leasing provides an alternate source of credit and financing more suited for depreciating technology assets. Don't invest in depreciation. Your money is retained for more profitable uses such as inventory discounts, marketing, additional staff and additional production capability.
You don't tie up your money. You avoid costly down payments. Off-balance sheet financing helps you better manage your balance sheet.

2. Equipment leasing offers tax benefits
Properly structured lease payments are 100% tax deductible business expenses paid from pre-tax earnings instead of after tax profits. Lease payments may be fully deductible, consult your accountant.

3. Leasing allows for more accurately forecasted income against expenses.
Leased equipment costs are predictable and can be more easily measured against the income new equipment is expected to produce.

4. Leasing allows for replacement of equipment as needed.
Leased equipment is expensed over a fixed period of time and is more easily replaced before obsolescence and physical deterioration take place, so devaluation is avoided. Stay on the Edge, Avoid Obsolescence Buying which promotes keeping equipment far beyond its useful life. Out-dated equipment is often shuttled downstream or stored away until it is less than worthless (sold for less than the costs of selling).
Leasing's built-in termination date, the lease term, can be synchronised with equipment's productive life. At end of lease, new equipment arrives and out-dated equipment is shipped out.

5. Asset management leasing and asset management.
The process of buying, maintaining and disposing of equipment can distract valuable resources from mission-critical priorities. Leasing can be implemented as outsourced asset management. A lease provides the use of equipment for specific periods of time at fixed payments. The lessor assumes and manages the risk of equipment ownership. At the end of the lease, the lessor is responsible for the disposition of the asset.

6. Equipment leasing provides a hedge against inflation.
Lease payment are based on the dollar's current value. These payments remain constant regardless of the future effect inflation has on currency value. Remember the early 80's, when interest rates skyrocketed from 9% to 21.5% in a single year? Unlike bank lines of credit with variable rates, lease payments are fixed regardless of what happens to the market tomorrow.
It requires a customer (Lessee) to make specific monthly payments over a mutually agreeable fixed period of time (typically one to five years). Title for the equipment rests with the leasing company (Lessor) for the term of the lease.

7. Leasing has operational advantages.
The advantages offered by the use, rather than ownership, of capital equipment can significantly improve the profitability of a business. Profits are produced by the use of equipment, not ownership.

8. Leasing has financial advantages.
Capital budget restrictions and extension of current credit lines are some of the most common reasons that many commercial industries look to lease financing as an extremely attractive alternative to paying cash for new capital equipment.

9. Acceptable and practical across New Zealand.
As an alternative source of financing, leasing has become so widely accepted that it is now the method used for 20% of all capital equipment sold in the New Zealand.
The primary value of equipment is in its use...not its ownership. Leasing underscores this premise and allows you total flexibility in both terms and payments.
By leasing, you transfer the uncertainties and risks of asset depreciation to the lessor, which allows you to concentrate on using that asset as a productive part of your business.

10. Cost effective.
Owning assets is costly and some of the costs are unexpected. When you lease, your risk of getting caught with obsolete equipment is lower because you can upgrade or add equipment to best meet your needs. Further, your needs can change over time due to changes in your business, such as diversification. Leasing allows you to stay on the cutting edge of technology.

11. Flexibility.
Businesses have different needs, different cash flow patterns, different - sometimes irregular - streams of income. Your business conditions - cash flow, specific asset needs, and tax situation define the terms of your lease. A lease provides the use of an asset for specific periods of time at a fixed rental payment. As your business grows and your needs change, you can add or upgrade at any point during the lease term through add-on or master leases. If you anticipate growth, be sure to negotiate that option when you structure your lease program. You also have the option to include installation, maintenance and other services, if needed.

12. Why should I use your company to help me with my leasing/finance solutions?
The purpose of our business is to help your business succeed. You should deal with a Broker/Leasing Company which gives you a sense of truth and fair dealing. You should deal with a Broker/Leasing Company that gives you the service that you need. You should deal with a Leasing Company that makes you feel comfortable about what they are telling you. You should deal with a Leasing Company that is trying to help and offer advice as opposed to trying to hustle you into a fast deal. You should deal with a Leasing Company that is trying to build a long lasting relationship and asks questions about your business to try and understand it better. We do all the above and more.
In addition, we don't believe in off the shelf packages because we know that no two businesses are the same. At MTL Finance we are geared to offer you the right solution, allowing us to custom tailor a program to fit your month-to-month or year-to-year cash flow needs, budget, transaction structure, cyclical fluctuations, etc. Some leases allow you, for example, to miss one or more payment without a penalty, an important feature for seasonal businesses.