Benefits of Leasing

For a business, leasing a property may have significant financial benefits, such as:

* Leasing is less capital-intensive than purchasing, so if a business has constraints on its capital, it can grow faster by leasing property than it would by purchasing a property outright.

* Capital assets may fluctuate in value. Leasing shifts the risk to the lessor. However, if the property market has shown steady growth over time, a business that depends on leased property is sacrificing capital gains.

* Leasing may provide more flexibility to a business which expects to grow or move in the relatively short term, because a lessee is not usually obliged to renew a lease at the end of its term.

* In some cases a lease may be the only practical option; such as for a small business that wishes to locate in a large office building within tight locational parameters.

* Any type of ownership comes with headaches. A leasing option affords the time to focus solely on running your business.

* Depreciation of capital asses has different tax and financial reporting treatment from ordinary business expenses. Lease payments are considered expenses, which can be set off against revenue when calculating taxable profit at the end of the relevant tax accounting period.