Financial Management Works suggests alternate financial options to businesses

Financial Management Works comes out with alternate financial options to leasing. The accounting services business recommends as alternatives commercial hire purchase arrangement or a business loan with a bank or financial organisation. The accounting services provider notes that each of these options will produce different results with tax benefits attached to each option.

Financial Management Works advises businesses to choose between leasing, commercial hire purchase and loans depending upon costs, interest rates and depreciation allowances. The accounting services business distinguishes between leasing, commercial hire purchase and loans.

Leasing allows a business to obtain tax deduction for the lease rental payments. However, the financial institution or bank providing the lease finance keeps ownership of the item and can claim depreciation. At the end of the lease period, the business is entitled with the first right to buy the item at its residual value. If the business fails to buy the item and the product brings lesser than residual value on the open market, the business has to bear the shortfall.