June 8, 2008
Reasons To Choose Cell Tower Leasing Arrangements Rather Than Outright Purchase
By admin
Leasing is the act of the owner of the property to let another person to use that property for a pre-agreed upon period of time in exchange for a pre-agreed upon amount of compensation. It may apply to land, or it may apply to a cell tower. Many corporations opt to enter into a cell tower leasing arrangement rather than outrightly build or buy new tower for their business operations. One reason is that many corporations lack the capital to build new tower. For such businesses, it makes more economic sense to simply lease cell tower because it costs less for them, especially if they need the equipment only for the short term. You can find offers of cell tower lease buyouts on internet.Corporations may also choose cell tower leasing arrangements rather than outright purchase because a cell tower leasing transaction will not be reflected on the balance sheet. This means the company can pursue getting loans from formal lending institutions since the equipment leasing transaction is not deemed a long-term debt or liability for the company. A corporation which has to sustain a prescribed debt-to-equity ratio or has debt covenants to adhere to may find it in its best interests to pursue cell tower leasing arrangements instead.
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