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Leasing Office Equipment

What is lease financing?

The main difference between leasing and loan financing is that in leasing the lease funding company purchases the asset you require and then ‘rents’ the equipment to you on a monthly basis for a predetermined period of time. This arrangement often has very positive tax implications and affects your balance sheet, and therefore your business strategy. However, before signing a lease, always get advice from your accounting and tax advisors. Leasing has many advantages, but it is not always the right fit for every circumstance or business model.

There are many different types of leases available, each designed to fit different needs or tax situations.

 

Advantages of leasing

Leasing generally gives you:

  • Control over your cash flow and working capital
  • Improvement of your financial ratios
  • Lower monthly costs
  • Protection from equipment devaluation or obsolescence
  • Sales tax that is spread over the lease period
  • The option of either returning the equipment at the end of the lease period, or buying it out

 

Types of Leases

FMV (Fair Market Value) Lease

This type of lease is the most common and allows you to:

  • Return the equipment back to us at the end-of-lease
  • Buy the equipment at end-of-lease at fair market value
  • Continue leasng the equipment on a month-to-month basis

 

Residual Lease

This lease can be customizable and allows you to:

  • Purchase the equipment at end-of-lease for a pre-set residual amount (usually $10 plus tax).*
  • Care must be taken as this type of lease is often not viewed by Revenue Canada as a non-depreciable expense.

        *Due to the guaranteed lower buy-out cost, monthly payments are slightly higher with a residual lease.

 

Unique Situations

Entering a slow season but need equipment now? We can help.
Whatever your situation, there are many creative leases that we can offer.

 

Please Contact Ribbon Encore for more information (519-826-7826).