Basics of Leasing

What is Leasing?
Leasing is an agreement (generally long term) to rent land, buildings, equipment or any other asset. In return the user (lessee) makes periodic payments to the owner of the asset concerned (lessor).A lot of businesses are now taking the option of leasing equipment rather than buying them. This is because of the advantages gained with taxation as well as less strain on the cash flow.

Basics Of Leasing
Leasing equipment or an asset is similar to renting it. What happens is that you end up paying the leasing company for the use of the equipment or asset and the payments that you make cover the original cost of the equipment plus provides the lessor with a profit.

The contract to lease generally runs for 2 to 7 years depending on the cost and the life of the asset concerned. This means that you have full use of the asset for the term (even if you don’t own it) without having to pay the full cost of it in one payment.

Over the term of the lease, the leasing company will recover from your payments the price of the asset plus ...

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