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What Is Leasing And What Benefits Can It Give Me?

Finance, Leasing

Most of our clients ask us, what benefits can I get from leasing a property? Find out why this scheme is more convenient for companies:

If you have been interested in the leasing scheme and want to know it in depth, in this article Global Leasing Alliance experts will tell you what it consists of and what are the advantages that you could obtain from choosing this financing scheme.

How does a lease work?

The first thing is to be quite clear about how the leasing scheme works.

1 Request.

When you as an entrepreneur need some type of machinery, for example, to transform raw material, you can go to a lessor and explain this need and make a request.

2 Purchase of assets

If your profile is adequate to obtain financing, what the lessor will do is use its resources to buy that machinery to later give you the use and enjoyment of this machinery so that you use it in exchange for a periodic payment called “rent”.

3 Monthly rent payment

You must pay the monthly rent for the entire duration of the contract. If you always pay on time, no default interest or fines are generated.

4 Residual Value Payment

In the end, the Residual Value of the property is paid to the lessor and you can designate to whom to transfer the property. Residual value is the depreciation cost of the asset your business used. There is also the option of financing new equipment or refinancing new assets.

What benefits does the lease grant?

100% financing: This mechanism provides you with 100% of the resources necessary to obtain the asset. This means that once your request is accepted, the lessor will cover the total cost of the property so that it is leased by you.

1 Protection against obsolescence:

Leasing is an excellent option if you want to acquire equipment with a high level of technological development or that is at greater risk of becoming obsolete because through this scheme you can constantly renew them.

2 You do not use your lines of credit

As in the lease, you use it, so it is kept free for other purposes of greater urgency in your company, such as: financing of higher levels of commercial assets, accounts receivable, and inventories, as a result of a seasonal or cyclical growth stage.

3 Improves net cash flow

In financing, advances are not required to buy an asset, so it does not decapitalize companies, with this, the resulting resources can be used for more pressing or profitable purposes.

4 One hundred percent Deductible:

Rent payments are fully deductible for Mexican Income Tax purposes.

5 It is an alternative for entrepreneurs and commercial companies:

It is one of the few options that commercial companies and newly created companies have to be able to acquire assets since these companies will hardly have access to bank loans or “reactionaries”, the former because their line of business is not susceptible to this type of credit and the second because of its recent creation or its low capital. In Global Leasing Alliance, if the partners demonstrate that they have experience in the industry, it does not matter if the company is recently created.

6 Flexibility in terms

The length of the lease terms is flexible and can be negotiated with the lessor to adjust to the growing needs of the company.

7 Best performance indicators on assets.

Regarding the return on investment, a lease will give you a better indicator since the utility you obtain divided by the cost of the asset will be much higher, remember that in the lease you are not investing 100% of the resources necessary to enjoy that well but a monthly rent for which the cost of the assets is reduced.

Get in touch with a Global Leasing Alliance executive so that he can advise you on the convenience of financing, either by lease or credit.

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