• Better Cash Flow. Leasing gives you access to the asset with minimal up-front payments and spreads the cost over time. You to pay for the asset with the income it generates while minimising the drain on your working capital.
  
  
• No debt. An operating lease preserves your credit options and does not influence your credit limit as it is generally not classified as debt but as expense (note that this advantage does not apply to finance leases!).
  
  
• Maximise Financial Leverage. Your lease can often finance everything related to the purchase and installation of the asset and may free up cash flow to pay for items such as training.
  
  
• Simplified cash flow management. Lease payments are usually flat, making cash management more predictable and easier than with a variable rate loan. The fixed interest rate of a lease also helps if interest rates rise.
  
  
• Tax advantage. Operating lease payments are generally tax deductible just like depreciation charges but are made with pre-tax money. Cash purchases, in contrast, are made with after-tax money. Hire purchase agreements allow the lessee to claim capital allowances.
  
  
• Flexible time frames. Leasing contracts can be structured to fit your requirements. Use an asset as long as you need it without owning it forever.
  
  
• Hedge against obsolescence. Depending on your end-of-lease option, just return the asset to the lessor. You will not have the hassle of selling the used asset or run the risks related to residual value and (technical) obsolescence.
  
  
• Additional advantages. Some leases offer additional advantages such as cancellation options or asset maintenance.

• More expensive. A finance lease is usually more expensive than an outright cash purchase as the payments include finance charges. However, leasing may cost less than other forms of financing. Also consider the tax advantages when making this calculation.
  
  
• Additional Guarantees. Depending on the credit rating of your company, the lessor might require additional guarantees. These may be provided by you, your partners or your bank and could affect your personal credit rating or your standing with your bank.
  
  
• Fixed Term. It may be impossible, or at least costly, to terminate a leasing contract early.
  
  
• Fixed Interest Rates. Interest rates are usually fixed throughout the lease which may prove a disadvantage in times of falling interest rates.

• Return of Asset Conditions. If you choose to return the asset at the end of your lease, the condition in which and the place where it must be returned are important aspects to consider carefully.
  
  
• Notice Period. If your lease includes the option to renew take note of any time periods in which to give notice in case you do not want to renew the contract. Some leasing companies will automatically renew the contract if you fail to give notice.
  
  
• Purchase Rights. If negotiating the right to purchase the asset at the end of your lease, a predetermined fixed price offers more value as the 'fair market value', which theoretically is always available to you.
  
  
• Maintenance Responsibility. Clarify which service and maintenance programs are included in the lease. If you are responsible for service and maintenance, make sure you do not have to provide an unreasonably high degree of it.

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