LEASING: EXPERTS OFFER TIPS ON WHEN, WHERE, WHY, HOW

AT A SEMINAR SPONSORED BY THE AMERICAN MANAGEMENT ASSOCIATION ON "NEW DIRECTIONS IN LEASING" IT WAS BROUGHT OUT THAT THE KEY TO LEASING IS THE USE OF ASSETS, RATHER THAN THE OWNERSHIP OF THEM, TO GENERATE REVENUE AND PROFITS. SINCE THE 1960'S LEASING HAS BECOME A MORE COMPLEX CONCEPT INVOLVING TAX SHELTERS, DISCOUNTED CASH FLOW, NEGATIVE CASH FLOW, AND LEVERAGING. A NEW TYPE OF FINANCING, LEVERAGE LEASING, PROVIDES GREATER FLEXIBILITY BY GUARANTEEING THROUGH A LONG TERM DEBT FIVE TIMES MORE CAPITAL FOR LEASING VENTURES. FOR THE USER, IT MEANS HE CAN WRITE OFF THE LEASE PAYMENTS AS AN EXPENSE AND KEEP THE FINANCING OF HIS EQUIPMENT ON THE LONG TERM DEBT SECTION OF THE BALANCE SHEET. FOR THE EQUITY HOLDER, IT MEANS HE CAN USE THE HIGH DEBT SERVICE PAYMENTS TO OFFSET EQUALLY HIGH EARNINGS FROM ANOTHER SOURCE, PROVIDED THE LEASE IS DRAWN UP THIS WAY. IN SELECTING A LEASE PROPOSAL, PRICE SHOULD BE THE DECIDING FACTOR. ALSO A TAX CONSULTANT AND, POSSIBLY A LAWYER, SHOULD BE AVAILABLE FOR GUIDANCE.

  • Publication Date: 1970

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Filing Info

  • Accession Number: 00219109
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Dec 11 1973 12:00AM