There's no better time to lease a temporary fabric structure than 2019. When compared to traditional structures, you might already know that Mahaffey's temporary fabric structures and fabric buildings offer some immediate cost savings for your budget, but there are a multitude of other benefits.
For example, did you know that leasing a temporary fabric structure can decrease your down-time while undergoing interruptive business activities, such as facilities renovation/expansion and manufacturing turnarounds? At Mahaffey, our project managers frequently find that the benefits of our structures are as unlimited as the creativity of each new project.
As we enter 2019, we thought it helpful to look back at the most proven scenarios where leasing a structure is beneficial.
- Conversion of Capital
When capital (cash) is conserved by financing or leasing equipment, it can be used for other company expenditures (New product development, increased marketing and promotions, sales expansions, etc.).
- Conservation of Credit and Budget
A Rental or Lease Agreement is not a loan. Borrowing reduces lines of credit and with projects that have tighter budgets, you won't be constrained with additional costs that occur with ownership.
- Balance Sheet Effect
If a structure is purchased and the money borrowed, LIABILITIES are increased; liquidity will be decreased. If structure is purchased outright (by cash), fixed assets are increased, current assets are decreased… less liquidity again.
- Impact on Statements
A lease for a fabric building has a direct effect on a balance sheet and current ratio because it is not considered a loan. The entire lease payment is treated as an expense item. However, we suggest you check this item with your own accounting and tax experts.
- Avoids Dilution of Ownership Equity
It may be better to lease or rent the structure than to dilute ownership in a company through equity financing to acquire funds.
- Simplify Accounting
Leasing relieves a user of the responsibility to maintain burdensome cost accounting records and eliminates structure and depreciation controls.
- No Commitment
Rental provides an inexpensive means to try a new structure without a long-term commitment.
- Hedging Against Inflation
Financing and leasing provides for payment over a longer term. Payments are made with tomorrow’s dollars which may be worth less than today's, and your lease stays the same.
- Tax Break
When you lease a structure, you’re not obligated to pay property taxes, like you would by owning a permanent structure.
Leasing is generally the lowest cost to use a structure for a designated period of time. Payments are fixed for the term and can include total costs including maintenance.
There are plenty of additional benefits of leasing a temporary fabric structure for a variety of projects, including environmental and energy savings improvements.