Lease or buy for cash flow

One of the advantages of leasing is that the terms offered often allows a business to acquire and use an asset with lower initial and amortized cash outlays than a financing amortization, thus improves cash flow.

The primary reason is that in a lease, only a portion of the acquisition cost is attributed to the incremental payments, due to the fact that the lease calculation recognizes a residual value for the asset when the lease expires.

Also, leased assets don't show up as a liability on the balance sheet, as debt does.