Why not just buy the equipment you need instead of leasing it?
    
Actually, there are three possibilities:
     
    ·  Purchase using existing cash resources. 
    ·  Purchase with available or new credit line.
    ·  Don't purchase - lease instead.
    
Today, one of the most critical factors any business faces is conservation of cash. Its often been said that the three most important factors in running a business is "cashflow", "cashflow", and "cashflow". Leasing provides external funding for your new equipment.
Even if you have existing or available credit lines (bank or other) leasing still makes good sense as it keeps those lines available for working capital, payroll, inventory, or other needs - some quite unexpected.  Don't waste your precious cash resources only to find out too late you should have leased.
     
While it makes perfect sense to purchase many types of assets, it may not make sense to purchase a computer system.  Most companies have rooms full of old PCs, peripherals, last year's hot software, etc. There is simply no benefit to owning assets that quickly become obsolete. You can't use it without suffering unacceptable efficiency degradations, and you can't sell it because the cost to do so exceeds its market value.
     
Then When does leasing start to make sense?
When you realize that computer system ownership is incidental to the real goal, e.g. better or lower-cost business operations. Let your equipment pay for itself, just as you pay your employees.  Why pay 3 - 5 years in advance for work not yet performed?
  
How long can I use the equipment?
You (the lessee) obtain use of the equipment for an agreed-upon (monthly, quarterly, etc.) payment. You pay for equipment on a monthly basis rather than cash up front.
  
Is it possible to update equipment at the end of the lease?
At the end of the lease term, your business is not "stuck" with outdated equipment. You avoid technological obsolescence. Programs are available that make it possible to bring in new, more productive equipment at the same or comparable lease terms.
  
What tax advantages does leasing offer?
Your lease payments may be fully deductible as a business expense. Leasing may help your business avoid Alternative Minimum Tax (AMT) Liability. We recommend that you consult with your tax adviser or accountant for specifics that pertain to your business.
  
What effect does leasing have on balance sheet liabilities?
Lease payments may be eligible for "off-balance sheet" treatment, where items are treated as an expense rather than a debt. Your tax advisor can help you with specifics that pertain to your business.
  
What about financing soft costs?
Your business may be able to include expenses associated with equipment use -- such as shipping, installation and software -- in the lease agreement.
  
How are my bank credit lines affected?
Leasing won't tie up your existing lines of credit -- so they remain fully available to fuel growth or meet operating expenses.
  
What are my payment options?
You can structure payments suited to the cash flow or budgetary requirements of your business. Lease terms can range from 12-60 months but may be extended with flexible renewal options.
  
What are the available end-of-lease purchase or renewal options?
Your business can purchase equipment, upgrade to new equipment or continue to lease at the end of the lease period.