You may be able to afford to buy the equipment outright, but before you make this decision you must consider the following: All leasing payments are rental payments and as such are an allowable business expense, therefore if a business is making money the profit can be reduced by the amount of the rentals you pay each year, which in turn reduces your tax bill. Payments are normally the same throughout the lease contract. This means that increases in interest rates do not affect you and your cash budget can be utilised more effectively. Leasing enables you to protect your cash to use for other needs such as new stock, staff training, advertising, new business opportunities and unexpected expenses.