The Advantages Of Leasing
A company’s boat on the Amstel.
Leasing is becoming more and more popular as it’s the perfect financial strategy for companies, providing them with various advantages and numerous business opportunities. It allows companies to leverage the favorable aspects of an asset while mitigating the associated drawbacks. Below, we would like to explain to you what leasing is at its core and how your company could take advantage of this business opportunity.
How leasing works
Leasing can be defined as a contractual arrangement where an entity, also called the lessee, secures the use of an asset from another party, termed the lessor, for a predetermined period. In this arrangement, the parties use a regular payment scheme, often paying a monthly fee for the usage of the object or asset. The fundamental premise of leasing is that a party gets the access and utilization of an asset without it requiring ownership. In a leasing arrangement, the lessee will pay a recurring fee to the lessor in exchange for the privilege of using the asset. This asset could be machinery, a vehicle or in some case even real estate. There are many possibilities when it comes to leasing.
In the terms of the leasing arrangement, parties will agree on what the duration of usage will be as well as agree on the reoccurrence as well as the height of the fees. This type of an arrangement is completely different to a classic purchase in which the ownership rights are transferred from the owner to the buyer upon payment.
There are many different forms of leasing as well, most of which can be categorized as an operating lease or a financial lease. An operating lease typically entails a shorter duration, which enables the lessee to use the asset without having the risks and disadvantages that come with ownership of the asset. Capital leases, on the other hand, contain terms that resemble ownership, often resulting in the lessee recording the asset on their balance sheet.
Advantages of leasing
Financial flexibility
One of the biggest advantages of leasing is the financial flexibility that it provides. Leasing minimizes the initial capital that’s normally required for outright purchases. By avoiding this substantial upfront expense, businesses preserve their liquidity, thus enabling the allocation of these funds to other critical operational areas, like expansion or research and development. This added flexibility is particularly advantageous for startups and smaller businesses that wish to conserve their resources during the initial phases of business operations.
Tax benefits and better financial planning
Another advantage of committing to a leasing agreement is that it has tax benefits to offer. Lease payments are often seen as operational expenses, which can reduce your company’s taxable income. This opportunity to deduct lease payments is very beneficial for businesses that are looking to optimize their tax liabilities and enhance their company’s financial planning strategies. The fixed lease payments also offer budgetary predictability, which aides long-term financial forecasting and planning.
Conservation of capital
By getting into a leasing arrangement, companies won’t have to pay such a substantial upfront cost, leaving them with more capital to work with. Companies no longer have to deplete their reserves on an asset acquisition but can channel their resources towards revenue-generating activities instead. This conservation of capital also provides them with the opportunity of debt reduction or strategic investments.
Maintenance and risk mitigation
Lease agreements usually delegate the maintenance responsibilities to the lessor, in turn relieving the lessee of the responsibilities and costs that come with owning such an asset. Furthermore, leasing diminishes the company’s exposure to market fluctuations, as the potential asset depreciation will only affect the leasing company.
The benefits of a corporate boat lease
A corporate boat lease presents numerous invaluable benefits to the company as it can be used as an exclusive marketing tool as well as provide the company with its own venue for various occasions. Using a corporate boat as a unique marketing tool means that you can host all kinds of events on the company’s very own boat. Not only will the venue be impressive in itself, but it will give all of the events’ visitors an experience they won’t forget.
Another benefit of a corporate boat lease is that you won’t have to worry about all of the risks and responsibilities that come with owning a boat. Instead, the leasing company will take care of everything so the company can use its boat to the fullest.
Lastly, the company’s boat can be used to maintain customer’s relationships. By having regularly scheduled meetings with the company’s clients, you can discuss ongoing business matters or address possible concerns the company or the client may be having. Having these meetings on the company’s own boat will also show the client the kind of privileges that come with doing business with your company.
Explore boatique’s corporate boat leasing services
Does leasing a company boat intrigue you? For more insight into our boat leasing services, we invite you to contact us. Discover the numerous opportunities that come with opting for a boatique corporate boat lease.
