Alternative Source of Capital Financing: Leasing will provide an alternative source of financing where a company is faced with tight credit terms, bank lending restriction or other economic factors. It releases credit lines than can be used for other purposes, i.e. it allows for full use of borrowing capacity.
 

Affordable Means of Acquiring Equipment: Leasing provides an affordable avenue for lessees to acquire the needed equipment with minimal initial cash out flow. This is because payment constitutes very small fraction of the equipment cost which is always spread over the lease period.
 

Flexibility in Lease Rental Payment: Lease rental can be structured to coincide with earnings generated from the use of the equipment. This is particularly advantageous in as situation where companies have seasonal cash flow.
 

Longer Payment Terms than Other Forms of Credit Facilities: Leasing affords the lessees the opportunity of payment over a longer period than with most other forms of financing. This allows the lessees the opportunity of reducing financial commitments particularly in times of stress.
 

Easy Accessibility of Equipment: Lease facilities are often easier to obtain than loans. Equipment under lease, while providing facility for use, also serves as collateral for the lease, since ownership actually resides with the lessors. Hence, in the event of failure on the part of the lessee to pay rental, the equipment can be retrieved by the lessor.
 

 Budget Limitations: Acquisition of equipment not complemented by capital expenditure budget can sometimes be accomplished through lease with the payment structure to be classified as operating expenses.
 

 Technological Considerations: When firms purchase equipment, they face the possibility that at some time, the asset may not be efficient as recently manufactured ones. The lessor may elect to obtain the new version for the lessee, if the latter desires.
 

 Collateral: There is usually no need for additional security or collateral required by the lessor before booking a lease for a lessee.
 

 Risk on Leakage: The risk of leakage in equipment leasing transaction is so negligible since the lessee does not receive the cash meant for purchase of equipment. The lessee requests for an equipment and the equipment is supplied to his factory or premises by the lessor. This type of transaction does not allow room for misuse of funds, thus all lease transactions are channelled towards productive assets acquisition.