Equipment leasing gives you the opportunity to be constantly updating. This means an immediate gain of having the very latest technology, and a long term benefit of not having to worry about that same technology becoming outdated.
We all know how quickly technology improves, creating an obsolescence risk whenever new technology is purchased.
By using business equipment leasing as a financing tool, you can be updating that technology every couple of years, without having to worry about disposing of your out of date, depreciated older technology.
- Cost of goods £10,000
- 3 Year lease @ £963.20 per quarter (1+11)
- Total payable = £963.20 X 12 = £11,558.40
- You pay £1,558.40 over 3 years in interest
Lease is 100% tax deductible so assuming tax rate is 25%… £11,558.40 X 25% = £2,889.60
Therefore, the lease is effectively self-financing and the reduction in tax to be paid (£2,889.60). This more than covers the interest charge of £1,558.40 plus… you’ve had the use of the original £10,000 for the last 3 years!