Particularly during economic downturns, we are reminded the importance of cash preservation and liquidity for businesses. What we have experienced these past several months reinforces the fact that keeping much-needed cash is simply critical to sustain business operations. However, businesses still need to acquire and maintain equipment, technology and software to run and grow.
Leasing and financing can ease budget concerns by providing flexible payment solutions.
First, leasing and financing can help a business keep its cash, protect its lines of credit, and spread out the costs of assets over time through flexible payments. In recent weeks, many companies have applied for and received payment relief from lenders – such as 90-day deferrals or restructurings – to ease capital concerns. If the equipment or assets are owned outright, flexible financing options to accommodate shifting budgets are not possible. In fact, if that equipment were owned, a business would be paying for 100% of the cost and not generating income if it were shut down due to COVID-19.