Originally Posted by I Work With My Hands Because Skool Wus Harddd
Leasing is lame. I buy equipment and use it for years. It's called maintenance. Too many dumbasses making up this throwaway society we live in today. Whatever happened to the good old days of paying for things when you bought them. Damned credit. It's ruining the world. Microwave disposable society is going to hell in a handbasket. Get back to the basics. If you aren't making something with your hands you aren't working. If you didn't pay cash for it when you bought it you don't own it.
Every business is different. You wanna use a 15 year old computer, dumbass?
I suppose Wrong State didn't teach about the time value of money, either.
For example, and you really should know this, say I have $10,000 to spend on a piece of equpiment. If I pay cash for it outright, I have the equipment, and I need to depreciate it. Look that up yourself.
Let's say I can lease it at an attractive rate; around 3.0% a year or less if you're doing well, using Fair Market Value terms (look this up yourself too). In VERY basic terms, I keep my $10,000, and put it into some form of investment that yields at least 3.0% per year, or more if I have a business in which I can reinvest and track things like return on capital. This means I get to use the equipment essentially for free. I can keep the $10,000 for something REAL important. My lease payment is less than the depreciation will be. And if it gets old and broken down, I have a way to get rid of it and upgrade to something newer (rather than needing to hold on to it and try to sell it myself).
But as McBear says, I've already wasted too much time explaining one of the more rudimentary facets of business finances.
Your thickheadedness aside, the world needs credit. Not because they don't have the money for it, but specifically because they DO have the money for it, and they can make a profit on borrowing the money they need.
If companies can't sell things to people on "credit" terms, they can't sell things period. That means lots of people get laid off. Which means they don't spend money fixing cars, or much else for that matter. Connect the goddamned dots.