Tax Benefits

Article 179
Through a quirk in the tax laws, it is now possible to "get paid in advance" to add equipment. Small businesses can write off up to $100,000 of equipment the year they put it in service. It is not necessary to depreciate it over several years. By leasing that equipment, you can have the government pay it's share in front, essentially getting free use for over a year.

Example: You buy a $100,000 piece of equipment and finance it on a 60 month lease/purchase contract with a monthly payment of about $2200. If you're in a 34% bracket, your first year write-off comes to $34,000, enough to make the first fifteen lease payments (34,000 2200 = 15.45).

Direct Tax Expensing
For companies not qualifying for or choosing the Article 179 alternative, lease payments are written off as made, eliminating the need for depreciation schedules and allowing faster write off. The result of this is more cash freed up for other uses than would be available in a purchase/depreciate environment.