Companies and organizations are turning more and more frequently to equipment leasing as a way to minimize cash outlays while providing patient access to state-of-the-art procedures. Businesses, hospitals and organizations want access to the best equipment yet the cost of equipment often makes outright purchase prohibitive.  The answer frequently lies in an equipment lease. Leasing provides for cash to be conserved for operations or expansion. Tying large amounts of cash up in one equipment purchase usually doesn't make much sense. Reviewing and quantifying an equipment leasing contract can be daunting, which is why there are lease review experts such as VIE Partners that will assist with the process of ensuring best pricing and best contract terms. The first piece of information you discover when you begin a lease analysis is the fact there are a variety of lease configurations. The lease can be a simple monthly payment plan with a balloon payment purchase option at the end of the lease. Or the lease can be a complicated financial plan that includes equipment maintenance, varying payment schedules and upgrade options. End of Lease Options Includes: - The equipment is owned at the end of the lease with no further payments.
- The equipment can be bought at the end of the lease at a depreciated value.
- The equipment must be returned to the company at the end of the lease.
Once the kind of end-lease option has been chosen, the value of a lease must be calculated to see if it makes more financial sense than an equipment purchase. Cash Control A lease analysis involves determining if the cash flow out during the life of the lease is justified when compared to the purchase of the same item. Leasing is a form of 100% financing and contains interest charges just like a loan. An economic analysis will determine if the present value of the lease is equal to, or greater than, the current market value of the equipment (or some percentage over 90%). A lease analysis will also consider the following:  - Rate of interest
- When title passes (if ever)
- Depreciated value of the lease at the end of the lease period
- Technological obsolescence at end of lease
- Affordability of lease payment
- Implicit interest rate
- Equipment maintenance provisions (existence or absence)
- Asset upgrade options
A lease analysis must consider all the different factors in order to determine the financial soundness of the lease. A lease frequently makes sense when purchasing equipment will deplete company cash. Medical equipment, technology & software, computer equipment, and vehicle fleets are just a few examples of equipment often purchased through a lease arrangement. An organization must manage cash flow on a daily basis in order to stay competitive. A lease agreement may prove to be the first step towards good financial management. Make sure the lease analysis is thorough and it reviewed by an expert! | 
