One of the most significant advantages of leasing over buying is tax benefits. If structured correctly, lease payments, unlike loan payments, can be expensed in the period they are paid as a general operating cost. This results in a lower after-tax cost for the credit, resulting in a lower tax liability compared to depreciating the equipment cost and expensing the interest portion of the loan payments. Expensing the full payment is also easier to account for on a company's financial statements because only one general ledger entry is necessary to "book" the expense (instead of two entries necessary to account for loan payments); in many cases, leasing will keep your current lines of credit intact.

By leasing, a company can finance 100 percent of its equipment costs. Since a lease often does not require a down payment, security deposit, or origination fee, a business can use capital or other credit means to invest in their company. Those investments frequently can produce income that negates the cost of the lease. The same justification can be made for businesses that can afford a large cash outlay for equipment. That cash could be reinvested in another, more profitable business sector, negating the cost of the lease.

Leasing allows a company to acquire equipment immediately without a huge cash outlay. Also, if structured correctly, a lease provides a monthly expense that doesn't change. If the equipment is owned or the lease is improperly structured, maintenance or repairs could punch a large hole in your budget.

The terms of most leases are fixed. Therefore, when the "real cost" of the lease is adjusted for inflation, a business can save money over time. The net cost of the lease will decrease while gross revenues increase.