We're here at First City Bancorp to give the top 5 reasons * why companies lease: 1. Hedge Against Technical Obsolescence & Inflation (30% of Companies Polled) In an inflationary economy, future lease payments are paid with inflated dollars allowing you to acquire more of tomorrow’s technology today.

2. Tax Considerations (28% of Companies Polled)

Lease payments can often be treated as a pre-tax expense rather than a repaying principal from after-tax profits.

3. Off Balance Sheet Lending (20% of Companies Polled)

Since leasing can often be classified as an operating expense instead of a liability, it has no negative affect on critical financial ratios.

4. Better Asset Utilization (15% of Companies Polled)

Leasing preserves your cash and credit lines allowing you to deploy them into more profitable areas of operation, such as inventory and/or working capital.

5. 100% Financing (7% of Companies Polled)

Lease plans usually pay for the total cost of the equipment. This includes shipping expenses, installation charges and training, which are typically not covered by conventional financing.

* Fortune Magazine Poll shows that 64% of the firms polled hove leased capital equipment within the past two years.

There are advantages to both methods of equipment financing and each company’s financial situation is different.