|
Lease
|
Cash
|
Bank
Loan
|
| Initial
out-of-pocket cost |
No
money down |
100%
of cost |
Down
payment, usually 15-25% |
| Length
of term |
Longer terms available, up to 60 months |
Paid in lump sum up front |
Usually
24 or 36 months, rarely longer |
| Impact
to credit line |
None.
Credit lines preserved |
Balance
sheet impact |
Decreases
credit limit with bank |
| Payments |
Fixed
payment, possible tax benefits |
Balance
sheet impact |
Floating
or variable rate - could go up or down |
| Upgrades
or add-ons |
Simple
to add or upgrade |
No
obsolescence protection |
Re-application
often required |
