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Lease Smart: Navigating the Risks of Long-Term Commitments

ARTICLE | October 08, 2024

Authored by Vasquez + Company


Leasing can be a smart financial strategy for businesses looking to acquire equipment, vehicles, or facilities without the upfront costs of purchasing. However, choosing the right lease agreement is crucial. The article "Crunch the Numbers Before Signing a Lease" explores the potential pitfalls of long-term leases versus the advantages of short-term options, providing insights to help businesses make informed decisions.


Key Points:

  • Long-Term Lease Risks: Extended leases often come with lower monthly payments but can lead to financial strain during downturns, leaving businesses tied to payments for obsolete or unused assets.
  • Short-Term Benefits: While typically more expensive, short-term leases offer flexibility, allowing businesses to adjust to changing needs without the burden of long-term obligations.
  • Cost Considerations: Analyzing usage patterns can reveal that renting equipment on a short-term basis can be more cost-effective than committing to a long-term lease.
  • Tax Implications: The tax consequences of leasing can be complex, making it essential to consult with a CPA before signing any agreements.

By carefully evaluating leasing options, businesses can avoid unnecessary financial strain and ensure they make choices aligned with their operational needs. For more information, read the full article here.

 


Our firm provides the information for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. This article is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

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​Vasquez + Company LLP has over 50 years of experience in performing audit, tax, accounting, and consulting services for all types of nonprofit organizations, governmental entities, and private companies. We are the largest minority-controlled accounting firm in the United States and the only one to have global operations and certified as MBE with the Supplier Clearinghouse for the Utility Supplier Diversity Program of the California Public Utilities Commission.

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