Leasing is a preferred means of financing for many businesses.However, it is not for every business. Leasing is inflation friendly. 2 As the costs go up over five years, you still pay the same rate as when you began the lease, therefore making your dollar stretch farther. 3 There is less upfront cash outlay; you do not need to make large cash payments for the purchase of needed equipment. Higher overall cost
Advantages and Disadvantages of Leasing: - Typically a lease can run anywhere from one to seven years. Most equipment necessary in commercial businesses, can be leased. Some leases provide an option to buy the equipment at substantially less money when at the end of the term of the lease. Disadvantages of Leasing: - Leasing is a preferred means of financing for many businesses. However, it is not for every business. 1 Leasing is inflation friendly. 2  As the costs go up over five years, you still pay the same rate as when you began the lease, therefore making your dollar stretch farther. 3  There is less upfront cash outlay; you do not need to make large cash payments for the purchase of needed equipment. Accounting for Leases. A lease is an arrangement in which one party, called the lessor, provides an asset for use of the other party, called the lessee, against periodic payments for a specified time period. Accounting for leases depends on the terms and conditions of the lease i.e. whether it is a finance lease or an operating lease.  SHARE SHARE TWEET EMAIL. When a tenant, or “lessee,” signs a lease, the lessee must then classify the lease as either a capital lease or an operating lease in its financial reports. The classification of the lease is determined by specific elements of the lease’s terms.  Disadvantages of Leasing Equipment. Higher overall cost. Leasing an item is almost always more expensive than purchasing it. For example, a 3-year lease on a computer worth $4,000, at a standard rate of $40/month per $1,000, will cost you a total of $5,760. Leasing a car is a good option for people who want to always have a new car. If a driver gets bored with vehicles easily, leasing may be a great option. At the end of a short lease period, two to four years, the driver can turn in the car and lease a brand new vehicle with all the latest bells and whistles. Leasing a car is one popular way to get a ride without having to pay full price. Since the lessee only gets the use of the car for a few years, the monthly payments are lower than if buying the car new. A leased car fits much better into a monthly budget. It is important that drivers know the advantages and disadvantages of leasing as well as an overview of all the ways a person can get access to a vehicle: buying, leasing, renting, and using a car-sharing service. If leasing is the right option, potential lessees should know how to lease a car and get a good rate. Leasing a car is a good option for people who want to always have a new car. If a driver gets bored with vehicles easily, leasing may be a great option. At the end of a short lease period, two to four years, the driver can turn in the car and lease a brand new vehicle with all the latest bells and whistles. When leasing a car, a person gets the use of a brand new car for a few years for a relatively low cost but does not usually own the car at the end of the lease period. Whether this is an advantage or a disadvantage depends on the buyer’s situation, needs, and wants. Leasing a car is one popular way to get a ride without having to pay full price. Since the lessee only gets the use of the car for a few years, the monthly payments are lower than if buying the car new. A leased car fits much better into a monthly budget. For example, on a $30,000 car, you’d finance the entire $30,000 purchase price with a car loan. With a car lease, you only pay the difference between the car’s price and what it’s expected to be worth at the end of the lease, which is a car’s residual value. So if the car’s residual value is 55 percent after three years, for example, that means the $30,000 car would be worth $16,500 at the end of the lease.  This is because in a lease the most expensive portion of the payment that you are paying for is the high depreciation expense and very little if nothing towards the value of the vehicle. Other disadvantages of leasing are as follows: • Terminating the lease can be very costly. • You don’t own the vehicle so you cannot make any major changes to the car, paint it, or add equipment to it. • Mileage restrictions and putting too many miles on the car can be very costly if you go over the allowed limit. 
http://www.residual-rewards.com/advantages-and-disadvantages-of-leasing.html http://accountingexplained.com/financial/leases/ http://yourbusiness.azcentral.com/advantages-disadvantages-capitalizing-lease-eyes-lessee-5505.html http://www.nolo.com/legal-encyclopedia/business-equipment-buying-vs-leasing-29714.html http://www.ebay.com/gds/What-Are-the-Advantages-and-Disadvantages-to-Leasing-a-Car-/10000000177633622/g.html http://www.ebay.co.uk/gds/What-Are-the-Advantages-and-Disadvantages-to-Leasing-a-Car-/10000000177633622/g.html http://www.ebay.com/gds/What-Are-the-Advantages-and-Disadvantages-to-Leasing-a-Car-/10000000177633622/g.html http://usnews.rankingsandreviews.com/cars-trucks/Buying_vs_Leasing/ http://newsone.com/1479715/the-disadvantages-of-leasing-a-car/
what is a disadvantage of leasing