Organizations often skip over the fact that businesses are successful from the use of equipment, not the ownership of equipment.
I'll use one of my newer clients as an example on why leasing makes sense. This particular health system was a cash-rich system. Capital expenditures were often funded with cash from operating activities, and operating lines were essentially untapped. The health organization wanted extreme flexibility for a project because there was uncertainty in the amount and length of time these assets were going to be in production.
With multiple resources of available capital, leasing was the best option for many reasons. First, the project could start very quickly. One of their primary concerns was budgeting dollars being allocated. We arranged billing so that the first bill wouldn't arrive with the client until after budgeting dollars were allocated. Secondly, we were able to help the system meet various bank covenants by maintaining certain debt / equity ratios. We were also able to create predictable cash flow as a monthly operating expense, which reduced spikes in their capital budget.
At the end of the day, my client is in a much better position to move their system forward knowing that they are not stuck with these assets.
Leasing creates both financial and operational flexibility. Period. There are so many ways to create value within an organization with leasing. I would encourage you to reach out and learn more about Meridian Leasing, and how our flexible leasing solutions are helping businesses get more and better equipment in their environment.
Regional Sales Manager
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