Advantages of Leasing - Lessees

1. There is 100% financing at fixed rates because they are open signed without requiring any money
down from the lessee. These helps the lessee to conserve cash that is needed for his operations. It is
specifically desirable for new and developing companies. In addition, the lease payments, they are
often fixed which protects the lessee against inflation and increases in the cost of money.
2. Protection against obsolescence. Leasing equipment reduces the risk of obsolescence to the lessee.
3. Flexibility. Lease agreements make contain less restrictive provisions than other debt agreement,
Innovative lessors can pay or
4. Less costly financing - leasing is cheaper than other forms of financing especially for new and
developing companies.

Lessor
1. Often provides profitable interest margins.
2. It can stimulate sales of a lessor’s product.
3. It often provides tax benefits to various parties in the lease.
4. It can provide a high residual value to the lessor.