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Tax Implications

Whenever you borrow money, you must consider how it will impact your business and personal taxes.  The discussion that follows speaks in generalities and may not apply to you personally or your business.  It is best that you speak with your financial adviser for the specifics that apply to you.  What follows is an overly simplified explanation.
The great advantage of most leases over a loan is they are treated as expense items, not as liabilities.  Because these payments can be deducted, you reduce your tax liability, while giving you a stronger credit profile.  This results in less taxes and increases your cash position as it diverts the funds going toward taxes and improves your cash position at the end of your tax period.

Not all leases are eligible to be considered as an expense.  Capital Leases are really loans dressed up as a lease and are considered a liability.  A Capital Lease payment is treated just like a loan so the payment is not fully deductible as it would be with a Operating Lease.