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The benefits of leasing
Leasing converts a large capital expenditure into small monthly payments. Hence the company has the profit-making equipment immediately and keeps their cash reserve available. Rather than investing the precious cash reserves in depreciating assets, the company can use them to help increase profits.
Lease rental is 100% tax deductible
The main reason that the majority of companies lease rather than purchase equipment is that they use leasing as a method of reducing their tax bills. This is because lease rental is 100% tax deductible, meaning that all payments you maker for your equipment are written off against your tax bill. For any profit making business, this means a substantial saving in real cost of acquiring equipment by lease rental. This could save you between 20-40% of your lease payments, depending on the rate of tax you pay. Payments on qualifying leases are written off as a direct operating expenses, rather than debt or outstanding liability, thus reducing short term taxable income. This status as a rental as opposed to liability on a company’s balance sheet is something the banks like to see, which is why a lease can be attractive. For this reason, leasing is often referred to as ‘off balance sheet’ financing – a tremendous advantage to both large and small businesses.
Ownership at the end of the lease
Lease rental is just that, a rental agreement. Title of the goods remains ownership with the lessor until the end of the term of the agreement. This means the equipment does not show on the company’s balance sheet, therefore not needing to be depreciated over a fixed period. The leasing company are the third party involved within the lease agreement; therefore they buy the equipment from the funder and then pass it on to the customers at the end of the term. This means that the customer can take full advantage of all the benefits of leasing but still own it at the end of the agreement. At the end of the term title and ownership is passed to the customers for one further monthly payment, which of course is also 100% tax deductible.
Of course all our KBS buildings can be purchased outright. A deposit payment upon placement of order secures your purchase with the balance due upon delivery. All new buildings take approximately 6 – 8 weeks to manufacture, refurbished buildings approximately 4 – 6 weeks depending upon size and specification.
Should lease purchase or outright purchase not be suitable then KBS are able to offer rental of their buildings over a contracted set period between 1 and 5 years. The cost for any other works including transport, cranes and associated site works would be invoiced any payable at the time of delivery to site.
For all enquiries regarding procurement options please call us on 023 8000 1134 or use the link below:
To arrange a free no-obligation consultation
call us on 023 8000 1134 or use the link below:
Kingston Building Solutions
Paddock View, Pollards Moor Road, Copythorne, Hampshire, SO40 2NZ
Phone: 023 8000 1134
Business Hours: 8am-6pm – Mon-Fri