The current economic climate and recent credit crunch have affected thousands of SMEs and other businesses, as banks have either reduced the overdraft limits or imposed different terms on their lending. The concept highlights the main reasons to lease and reviews the benefits, disadvantages and key success factors of leasing.
Leasing is a process by which a firm can obtain the use of certain fixed assets for which it must pay a series of contractual, periodic, tax deductible payments. It is a contract between the funder (lessor) and the end-user (lessee) for the acquisition and use of an asset and/or solution and (if included) any associated costs, such as maintenance in return for payment over an agreed period (Padley and Dixon, 2005). In other words, leasing is a form of financial activity associated with the transfer of capital goods for temporary use for a defined time against payment.
Leasing Description *
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Leasing Strengths *
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Leasing Videos *
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Leasing References (4 of up to 20) *
- Banks, E. (2007) Finance: The Basics, Routledge, NewYork, USA.
- Brealey, R.A., Myers, S.C., and Allen, F. (2008) Principles of Corporate Finance. McGraw-Hill/Irwin.
- Brick, I.E., Fung, W., and Subrahmanyam, M. (1987) Leasing and Financial Intermediation: Comparative Tax Advantages. Financial Management, Vol. 16(1), pp. 55-59.
- Burger, A. (2011) Sungevity, Rabobank team up with $75 million residential solar leasing fund. Scientific American, Oct. 14, 2011.
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