Equipment Lease vs Buy (NAL) Calculator
Is it financially more advantageous to lease industrial equipment or purchase it outright using bank debt finance?
Financial Inputs
Annual lease rental payable to leasing company (100% tax-deductible).
Commercial bank term debt interest rate available for asset acquisition.
Section 115BAA corporate tax rate.
Estimated market resale value of asset at the end of tenor.
Recommended Financial Strategy
L
Net Financial Difference (NAL)
1,66,440
PV Cost of Leasing
1,13,96,305
PV Cost of Buying (Debt Funded)
1,15,62,745
Key Financial Takeaways
- Leasing provides a net financial advantage of ₹1,66,440. PV of Leasing is ₹1,13,96,305 vs ₹1,15,62,745 for buying. Retain working capital liquidity and avoid obsolescence.
Frequently Asked Questions
Why is the after-tax cost of debt used as the discount rate in lease-vs-buy evaluations?
Lease payments and debt servicing commitments are contractually fixed obligations with near-identical financial risk profiles. Standard corporate finance theory dictates that lease cash flows must be discounted at the risk-adjusted borrowing rate: Kd × (1 - t).
Calculators on this platform provide indicative mathematical estimations based on industry-standard financial appraisal models (including Tandon Committee Method II, Nayak Turnover Method, and standard compound amortisation).
They do not constitute a formal facility sanction, credit commitment, or legal advisory from SME PAISA or any partner banking/NBFC institution. Final terms, interest margins, security stipulations, and credit sanctions remain strictly subject to formal credit appraisal, audited balance sheet verification, CMA Data assessment, and risk committee approval by institutional lenders.
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