Very few businesses have enough cash on hand to be able to purchase expensive equipment outright. Especially for new businesses, that amount of cash could seriously jeopardise cash flow if paid out for new equipment. For more established businesses, it also makes sense not to purchase equipment, especially if they intend on swapping it for a newer model in the future. This allows business owners to avoid dipping into cash reserves or working capital that can be used instead for business growth initiatives and to improve cash flow.
