Benifits of Long Term Rental:

CONVENIENCE
In instances where a company only needs a piece of equipment for a limited period of time, short-term leases can be most convenient. Rather than go to the trouble of negotiating purchase, arranging insurance and registration, negotiating resale, and canceling insurance and registration, a business can simply rent the item for the duration of time needed. "Sometimes the cost of short term rentals may seem prohibitively high, or you may find it difficult to rent at any price," wrote Brealey and Myers. "This can happen for equipment that is easily damaged by careless use. The owner knows that short-term users are unlikely to take the same care they would with their own equipment."

FLEXIBLE FINANCING TERMS
As Jack Wynn stated in Nation's Business, some lease arrangements are structured so that 100-percent financing is available. "Although payments for a lease may be somewhat higher than those for a conventional loan, there is no down payment, which helps preserve the lessee's operating capital and borrowing capacity. Similarly, leasing is an 'off the balance sheet' form of financing that is considered an operating expense, not a liability. This allows companies to acquire equipment without the acquisition affecting their capital budget. And lease payments usually can be spread over a longer period of time than the one to three years customary for bank loans."

CANCELLATION OPTIONS
Some lease agreements provide lessees with cancellation options in the event that the equipment proves inadequate for the company's needs over the course of the agreement. Upgrades are sometimes available through these options. One vital category of equipment that often includes such an option is computer systems. "Computers are frequently leased on a short-term cancelable basis," stated Brealey and Myers. "It is difficult to estimate how rapidly such equipment will become obsolete, because the technology of computers is advancing rapidly and somewhat unpredictably. Leasing with an option to cancel passes the risk of premature obsolescence from the user to the lessor. Usually the lessor is a computer manufacturer or a computer leasing specialist, and therefore knows more about the risks of obsolescence than the user. Thus the lessor is better equipped than the user to bear these risks." A lease agreement equipped with a cancellation option may be more expensive than one that is not so adorned, but many small business consultants contend that the added security is worth the additional expense.

TAX BENEFITS
Under so-called "tax leases," the lessor owns the equipment for tax-reporting purposes. "In a tax lease, the lessee is 'trading' the tax benefits of equipment ownership with the lessor for favorable payments and more flexible tax management," noted Deborah Borow in Business First of Buffalo. "Depending on the lessee's specific tax situation, this lease feature can significantly lower the total cost of equipment."
Synthetic leases, meanwhile, are structured as a loan for tax purposes but as a lease for accounting purposes. "It allows corporations to acquire assets that are financed off the balance sheet while retaining the tax benefits of ownership," said Borow.

MAINTENANCE
This option generally results in higher lease payments, but it is often money well-spent for small companies with limited financial and workforce resources. Under the terms of full-service leases, the lessor is responsible for all maintenance associated with the equipment being leased.

SPEED
Businesses in need of securing equipment quickly often find leases to be preferable. Purchases requiring business loans, on the other hand, often take a week or more to complete.