| rental |
lease |
cash |
|
Can have escalations |
Cannot have escalations |
Cannot have escalation |
|
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 specific needs - i.e. deposit, upgrades, escalation, term, insurance |
Little flexibility |
N/A |
|
Improves company equity and value ratios |
Capitalised |
Capitalised |