Pros and Cons of Leasing

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Pros: · Prime Property. A leasing office space option provides a business with the chance to rent in an area with a good location and high image. If your small business is dependent on location and image, such as retail or restaurants, the leasing option is much more affordable. · Free-up Working Capital. With your money not tied up in real estate your business can respond to opportunities in the market. In addition, your ability to borrow funds will not be as limited as with buying office space. You don't have to pay the full cost of the asset up front, so you don't use up your cash or have to borrow money. If you have not bought the asset outright, you won't have to worry about any overdraft or other loan taken out to finance the purchase being withdrawn at short notice, forcing early repayment · Easier to qualify. A strong credit rating will not be quite as critical for leasing as it would be for buying. This may be a big concern for start-ups and small businesses. · Tax deductions. Your monthly lease payment is tax deductible because it's a business expense. The business can usually deduct the full cost of lease rentals from taxable income · Freedom. You'll be able to sublet and move to another location if you need or want to, with no hassle of selling before you can move and no loss from owning a building in a bad real estate market. if you use an operating lease or contract hire, you may not have to worry about maintenance · More time and money. You'll be free from the headaches and cost of maintaining your own building, with more time to focus on running your business. You pay for the asset over the fixed period of time that you use it, which helps you budget for the future. you can spread the cost over a longer period of time and match payments to your income Cons: · you

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