UNLIKE AN OUTRIGHT PURCHASE, rental payments on a leased sign are entirely tax deductible.

You will no longer need to worry about depreciation rates or other tax complications.

The money saved with a lease allow you the benefit of putting extra capital back in your own business.

When a display is leased at a fixed rate per month, it allows you to know in advance exactly what the cost of your advertising will be.

Display leasing results in bookkeeping convenience and simplification, elimination of tax problems, a stabilized expenditure not affected by economic trends, wage increases or tax and insurance rate increases, plus the extra profits earned by the working capital you retain by leasing rather than buying.

Advantages of Leasing

Leasing

A lease contract extending over a fixed term.

Advantages:

• Competitive prices
• Off balance sheet financing
• Faster tax write off
• Profit through use, not ownership
• New and used equipment
• Hedge against inflation
• Equipment obsolescence protection
• Easy add-on's
• 100% financing
• Conserves capital
• Flexible terms
• Preserve bank lines
• Can lessen tax liability
• Fixed payments and terms
• Create new credit source

Disadvantages:

• May be non-cancelable agreement
• Requires Involvement

Cash Purchases

Using working capital for acquisitions. Appropriate when lacking investment alternative for excess cash, or annual depreciation expense exceeds annual capital expenditures.

Advantages:

• No finance charge

Disadvantages:

• Negates time value of money
• No hedge against inflation
• No obsolescence protection
• Attacks cash reserves
• No after-tax savings

Bank Loan

Repaid in regular installments. Appropriate when bank lines remain untapped or there is a loan covenant requirement

Advantages:

Disadvantages:

• Extensive documentation
• Non-financiable charges
• Exhaust credit lines
• May require floating rate
• Can be subject to cancellation or recall
• Capitalizes equipment
• Relatively short term
• No obsolescence protection
• May Require: Compensating Balances, Down Payment, Origination Fee