Rental |
Lease |
Cash |
Can have escalations
|
Can not have escalations |
Can not have escalations |
Vat Payable monthly
|
Vat Payable upfront |
Vat Payable upfront |
Interest calculated on cash price before VAT
|
Interest charged on top of VAT |
Interest lower over period as cash paid upfront |
100% tax deductible
|
Interest portion tax deductible |
Deducted by depreciation via balance sheet annually |
Operating expense in Income Statement
|
Appears as an Asset in financial statement |
Appears as an Asset in financial statement |
No CAPEX approval required
|
CAPEX approval required to purchase assets
|
CAPEX approval required to purchase assets |
Not restricted by company budgets
|
Restricted by company budgets |
Restricted by company budgets |
No deposits required
|
Usually requires upfront deposit |
Cash outlay upfront |
Rental can be tailored to specific needs – i.e. deposit, upgrades, escalation, term, insurance
|
Little flexibility |
N/A |
Improves company equity and value ratios
|
Capitalized |
Capitalized |