What is a primary advantage of leasing capital equipment?

Leasing capital equipment provides the primary advantage of minimal upfront cash outlay. When a business chooses to lease rather than purchase equipment, it can conserve cash and thereby allocate financial resources to other critical areas like operations, marketing, or expansion. This is particularly beneficial for companies that may not have substantial capital readily available but need the use of equipment for various operational needs.

In contrast, the other options present features that often do not align with leasing. For example, guaranteed purchase at the end of the lease, full ownership after the lease term, and the notion of no maintenance agreements needed are not characteristic benefits of leasing. Rather, leasing typically means that the equipment is returned at the end of the term unless a buy-out option is exercised, and maintenance responsibilities can vary greatly depending on the lease agreement. By minimizing upfront costs, leasing can provide operational flexibility and reduce financial risk, making it an attractive option for many businesses.