What is an operating lease? 

Years ago, the word "operating" actually meant that you got an operator along with the equipment, as well as fuel and other essentials to make the thing work. Now it is an accounting term referring to a lease that remains off balance sheet (as all leases used to be). Operating lease obligations are referenced in the footnote section of the financials and not in the Balance Sheet as assets and liabilities.

Given reasonable alternatives, most companies will opt for structuring equipment lease transactions to meet the accounting criteria for operating lease treatment. This reduces the level of debt on the books and improves key financial ratios, such as debt to equity. In addition, financial performance indicators such as return on assets (ROA) are also improved. The better the financials look, the easier it is to get needed financing in the future.

Our Lease Options are directly with eMED, INC – we don’t out source our customers to other financial institutions, we provide our Lease Payment Options directly with you so we make sure we find a plan that best meets your individual needs. We trust all our customers and have had outstanding long-term relationships with them for much of the last decade.

Since we began the eMED Lease Program, we have helped more customers save more money, keep capital costs down, and have documented more life saves than anyone in the country. Our monthly payment plans make it easy to own life-saving Defibrillators and AEDs for only a fraction of the cost.

Call 1-866-327-EMED (3633) and ask about our AED Leasing Program.
 

Are there other accounting benefits to leasing? 

For companies who are concerned about the alternative minimum tax (AMT) leasing is often a better alternative, as accelerated depreciation is a component of the "tax preference" items that work into the AMT calculation.

Even if a company’s tax burden isn’t quite down to an AMT level, keep in mind that if the lessor is in a higher tax bracket than you are, this can result in lower payments to you. Since someone can take the depreciation benefits, it might as well be the entity with the higher tax profile.