Banks prefer to loan long-term money on a floating or variable rate tied to prime, or some other indices. This places the rate risk on you instead of the bank. Lease rates are fixed for the term of the lease and are often better or comparable to that of bank rates.Soft Costs
Soft costs, including sales tax, shipping, installation, training, and software, most bank loans will not include, even though these may be integral parts of your equipment financing needs. Leasing is 100% financing and can cover all soft costs.Down Payment
Banks typically require 10 to 25% down on any equipment financing. Leasing is 100% financing and rarely requires security deposits.Security
Banks take a security interest on all of your company's assets. Leasing companies take security on only the asset leased.Disclosure
Banks require a full financial package to help them make their own credit decision on your loan. Leasing requires a one page application and possibly some supplemental information.Tax Write Off
Since bank financing makes you the owner of the equipment, your only tax advantage is depreciation and the loans interest. Lease Payments may be 100% deductible or may be a form of accelerated depreciation depending upon the lease type and your company's financial structure.