Downsides of leasing
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Leasing, while beneficial in certain scenarios, can have downsides. For healthcare organizations, leasing major equipment can lead to increased expenses due to commitment fees and other hidden costs . In developing countries, Small and Medium Enterprises (SMEs) face challenges accessing traditional financing, leading them to consider leasing as an alternative. However, only a small percentage of SMEs actually utilize leasing facilities, indicating limited adoption . In the ocean carrier industry, maintaining a balance between leased and owned containers is crucial, but the leasing industry has seen a decline in initial cash investment returns over time, impacting profitability . Additionally, factors like economic climate, legislative inconsistencies, and lack of support from the state can hinder the efficiency and volume of leasing activities in countries like Ukraine .
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| Papers (4) | Insight |
|---|---|
| Downsides of leasing include economic climate impact, inflation, war, pandemic, currency exchange rate fluctuations, legislative inconsistencies, lack of state support, and internal factors hindering development. | |
Open access•Journal Article 1 Citations | Pitfalls of leasing include commitment fees, progress payment interest, residual value, and other hidden costs that can significantly impact a healthcare organization's expenses and cash flow. |
5 Citations | The downsides of leasing in the container industry include declining initial cash investment return (ICIR) for lessors due to a shift towards owned containers, leading to potential structural issues and marginalization. |
12 May 2013 | Leasing for SMEs can lead to limited access to finance due to reliance on cash flow, potentially restricting growth and flexibility compared to traditional loans. |
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