Rent
While our rental programs offer many of the same advantages or benefits of lease programs, there are three major distinguishing characteristics of renting:
- The contract period for rental provides complete flexibility with contract periods as brief as a day, week, month, or up to one year. However, it is important to note that as rental terms extend, the economic benefits diminish.
- Rental equipment includes the provision for maintenance unless special provisions are made to the contrary.
- Rental provides an inexpensive means to try a new fabric structure without a long-term commitment. In effect, it is a paid demonstration.
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Lease
As with buying, leasing your permanent or semi-permanent aircraft hangar also offers several advantages:
- Leasing can free working capital for other investments while not affecting the customer's borrowing power or credit line. Lease payments may provide a tax deductible business expense, reducing tax liabilities.
- Leasing encourages a more orderly planned inventory replacement cycle, before maintenance costs become excessive.
- Leasing eliminates used inventory disposal problems for the user.
- As a rule, it is usually easier to gain approval for a structure under a lease program than as a capital expenditure.
Some of the biggest advantages of leasing are the opportunity to reduce operating expenses by replacing over-aged inventory without a large capital outlay, the establishment of realistic replacement schedules, and standardization.
Leasing simplifies budgeting, bookkeeping and accounting because it greatly reduces paperwork and administrative requirements. At the same time, records can be enhanced to provide information on inventory utilization and projections for replacement timing. In considering a lease, remember that options may be incorporated into the plan to give users a variety of alternatives at the conclusion of the contract period.
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Lease/Purchase
If you're weighing the advantages of a lease versus a purchase, consider the flexibility of the lease-purchase option. With this option, the standard lease agreement includes the purchase price for the structure, given its age and condition.
Up to 80% of your lease payments are credited toward the purchase price. You may buy the structure at any time for the outstanding balance, or return the structure when your project is complete, with no future obligation.
The lease / purchase option is ideal when there is uncertainty surrounding a project. Uncertainty takes many forms:
- Length of time a structure might be used
- Space considerations that might require a larger or smaller structure in the future
- The desire to use the structure before committing to the purchase
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Purchase
Making your cash purchase of a permanent or semi-permanent aircraft hangar with funds available from working capital is beneficial to you in several ways:
- Service fees, interest expense and financial fees are waived.
- Inventory cost is shown on the balance sheet subject to the depreciation methods used by the customer.
- Customer ownership is immediate.
Although outright purchase may provide the lowest total cost, other factors should also be considered:
- Working capital (cash) which could be used elsewhere is reduced.
- Outright purchase converts cash into a fixed asset (inventory), thereby weakening the customer's "current" ratio. Accordingly, most companies prefer to use available credit lines or time purchase plans if ownership is intended.
Financing has the same general advantage offered by leasing or rental plans – a limited cash outlay. However, financing provides the depreciation and tax benefits of a cash purchase (ownership).
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