Lease Financing

Essay # 116108

Business > Finance, Investment and Banking

Lease Financing

An overview of the business financing strategy of leasing in order to save start-up cash.

1,159 words () | 2 sources | MLA | 2009 United States

Paper Summary:

The paper discusses the advantages of leasing that include the fact that it is not considered a credit liability if structured correctly and it affords the businessman the opportunity to obtain everything needed for a startup operation. The paper reveals the possibility for a businessman to start up a leasing company and lease equipment to his second company. The paper explains how credit worthiness is determined and how the financial strength of a business is examined. The paper also relates that while it is possible to pay a lease off early it is not possible to cancel. On a cautionary note, however, the paper warns that a businessman must be sure of what he is doing before he signs his name to a leasing contract.

From the Paper:

"In recent years more innovative ways have been sought to obtain startup capital for new businesses. Tales are told all the time of how a businessman will finance everything he needs by maxing out his credit cards. This is a very expensive way to get started but sometimes it is the only way.
"Lately companies have sought to save start up cash by leasing everything from the front door to the firewall. Equipment can be leased a lot cheaper and with less secure credit than it can be purchased. It would pay, however, to go to the added expense of allowing a lawyer look over the final agreement, however, and could save money in the long run. The businessman needs to know the exact terms and every cent he is obligated to pay. Hidden cost and balloon payments must be avoided."

Sample of Sources Used:

Allbusiness.com Equipment Lease Financing no date Retrieved 12-12-06 from:http://www.allbusiness.com/business-finance/leasing-equipment-leasing/982-1.html
Erving Leasing. Com FAQ Lessees no date Retrieved 12-12-06 From:<http://www.ervinleasing.com/main.asp?id=7>