How do I decide if leasing fits my companys needs?
The first step is to decide what equipment you may want to own “forever” and what might be more practical to lease. If you do this objectively, you will probably find a relatively small pool of “must own” stuff. For example, many people are surprised to learn that the major US airlines lease most of their aircraft. The airlines have decided to save their cash and borrowing power for operating requirements. If you are considering a large lease transaction, you may want to do a formal “lease versus purchase analysis”, which compares after tax cost of ownership for the two alternatives and estimates the residual value required for your firm to be neutral as to which choice is made. Many lessors will perform this service for you for free but be sure to check their math, as they are usually going to be predisposed towards the leasing alternative. One caution: as a casual liquidator of assets into the used equipment marketplace, it is difficult to get anything approaching full value. Therefo
