There are a number of disadvantages to lease financing:
More expensive. A finance lease is usually more
expensive than an outright cash purchase as the payments
include finance charges. However, leasing may cost less
than other forms of financing. Also consider the tax advantages
when making this calculation.
Additional Guarantees. Depending on the credit
rating of your company, the lessor might require additional
guarantees. These may be provided by you, your partners
or your bank and could affect your personal credit rating
or your standing with your bank.
Fixed Term. It may be impossible, or at least
costly, to terminate a leasing contract early.
Fixed Interest Rates. Interest rates are usually
fixed throughout the lease which may prove a disadvantage
in times of falling interest rates.
