Cashflow Relief
The negligible initial capital outlay required from lessee and the fixed repayments tied to cashflow patterns help to ease cashflow constraints on the capital budget. Capital can then be employed for other profitable purposes.

Tax Advantages
100% of all rentals are offset against lessee’s taxable profit. Thus lessee has the opportunity to completely write off the full cost of the assets against taxable profit within a relatively short period normally three years.

Under outright purchase the cost of the asset is written off over a period of more than three years, which decreases the annual capital allowance and hence the tax benefit that the purchaser enjoys.

Under the traditional credit option only the interest can be written off against taxable profit.

Simple Security Requirements
Lease finance is relatively easier to access because it normally does not require collateral security as other forms of credit. This means that businesses (with good potential), who do not have collateral security can benefit from leasing.

Off Balance Sheet Funding
Under the operating lease structure, usually referred to as the off-balance sheet financing method, leasing enables the lessee to use productive assets without increasing its asset base. This enhances the balance sheet as no asset or liability is shown and Return on Assets increases. The lessee does not provide for depreciation expense in the Profit and Loss account, impacting positively on Net Profit.

OTHER BENEFITS OF DOING BUSINESS WITH US