Product leasing, as an alternative to ownership, is not a new industry. While leasing is surely a devise of the twentieth century financier, its origins may be found in the days of ancient Rome, when ship manufacturers frequently rented of leased their vessels to merchants and traders who wished to sail the Mediterranean Sean. Since that time, the leasing concept has been widely embraced and expanded to include a broad range of products. The business equipment and automobile industries have demonstrated to business management the usefulness of the lease, not only as a serviceable financial tool, but also as an effective means of marketing. These firms developed profitable approaches to implement their business strategies through leasing.
Leasing as a financing tool started to grow rapidly in the 1950's and 1960's. At that time, the financial community witnessed significant increases in the leasing of heavy equipment form a firm that did not manufacture it, and in personal property leasing, such as automobiles. During this period National Banks started financing leases, making the tool a more acceptable one.
As business started discovering the accounting aspects of leasing it became more desirable as an alternative to paying cash, or financing equipment on a loan. Various tax incentives have increased its popularity also.
Today equipment leasing covers practically every kind of equipment, and every kind of business. It is done by all kinds of financial organizations from small finance companies to Wall Street. It has become one of the most important elements in providing the tools to build the American economy.
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