Post by troycuthers on Jul 7, 2019 1:28:25 GMT
Since some leases are not capitalized, the equipment is not depreciated over long periods of time as in purchasing, which can be restrictive for customers’ flexibility in moving to new and better technology in the future. TCO studies show that holding old assets too long becomes more expensive than their replacement cost.
Regardless of the size of the company, cash flow is the life line of business. Even for companies with large cash reserves, financing equipment acquisitions makes business sense by corresponding cost to benefit. Cash flow becomes anticipated and justifiable. Tying up working capital and lines of credit is not tolerable for the typical budget. Smart businesses pay for the equipment as they use it over the finance term and keep working capital liquid to fund investments and growth.
Regardless of the size of the company, cash flow is the life line of business. Even for companies with large cash reserves, financing equipment acquisitions makes business sense by corresponding cost to benefit. Cash flow becomes anticipated and justifiable. Tying up working capital and lines of credit is not tolerable for the typical budget. Smart businesses pay for the equipment as they use it over the finance term and keep working capital liquid to fund investments and growth.