The Many Advantages of Leasing

Equipment leasing is gaining popularity in the turf industry as golf clubs, schools, councils and contractors need to preserve scarce capital and lower their operating costs. Leasing is also extremely flexible enabling a contract to be structured in a variety of ways, for example;

  1. Staggered payments – low in your off-season and higher during peak cash flow periods
  2. Maintenance plans built into the monthly lease payments
  3. Maintenance bonuses where you share in any profits made on sale

Experience has shown that there is little difference in the long-term cost of owning or leasing equipment when interest is taken to account. But with leasing;

  1. Maintain cash flow – as no capital is needed up front.
  2. Less down time – as always using the latest machinery in its most trouble free years.
  3. Easy to budget – as it is a fixed payment over a finite time period.
  4. Payments are tax deductible for businesses (This is not applicable for incorporated societies)
  5. For peace of mind maintenance can be built into monthly lease payments.

Parkland is the Leasing Expert

An intimate knowledge of finance and equipment markets allows Parkland to structure a lease contract to suit your organisation. A Parkland lease can even include features such as staggered payments (low in your off-season and higher during peak cash flow periods) and excellent maintenance bonuses where you share in any profits made on sale.

Leasing is not only available for new but Parkland will also purchase your existing equipment on a lease back basis.

Thinking About Leasing?

To determine if leasing or owning the equipment is better for you:

  1. Take the current hire purchase interest rate, and
  2. Your estimate of the value of the equipment at the end of the lease, and
  3. Mark this point on the graph.
  4. If your point is above the breakeven interest rate (in the green shaded area) then leasing is cheaper. If it is below the breakeven interest rate, then owning is cheaper.

Leasing’s great advantage is that a contract can be structured in a variety of ways, to suit a variety of needs.

Here’s How a Parkland Leasing Contract Could Work For You

Example Monthly Basis

Toro Reelmaster 3100 Sidewinder

Lease Term3 Years
Expected Annual Usage500 Hours
Special ConditionsRight of Renewal for Extra 3 Years
Payment Method Selected By YouFixed Monthly
Monthly Cost$980 + GST

Example Hourly Basis

Toro Groundmaster 7210 Zero Turning Radius Mower

Age of Commencement of Lease3 Years
Expected Annual Usage900 Hours
Purchased by you for$14,000 + GST
Lease Term2 Years
Payment Method Selected By YouVariable on Hours of Use
Monthly Cost$980 + GST

The Main Benefits of Leasing

  • No capital is needed up front.
  • The capital cost of equipment is not shown on your balance sheet.
  • You can select either a short or long term contract.
  • Payments are tax deductible (this is not applicable for incorporated societies – but then depreciation and interest aren’t either).
  • Maintenance may be built into monthly lease payments.
  • As the supplier, Parkland remains the legal owner of the equipment. At the end of the lease, the equipment is returned to us to sell. Any loss made on the sale is carried by Parkland.
Toro Titan - Ride on mower

Is Leasing a Better Option?

Experience has shown that there is little difference between the long term cost of owning or leasing mowing and turf renovation equipment. Whether you chose a lump sum capital payment or a regular monthly hire charge, the outlay is similar when interest is taken to account.

Owning equipment may be a better bet for those with a low cost of capital – for example, organisations with cash reserves on long-term bank deposit, at low rates of interest.

The value of equipment at the end of a lease is a significant factor. Parkland can calculate the net present value to provide the answer.