If you are considering leasing employees, make sure you take these steps along the way to be certain that leasing is the right option for you.

For a bank, the leasing business can take the form of either a loan that the borrower uses to lease equipment from an independent source, or a direct lease from a bank subsidiary company that owns the equipment. The duration of the loan is tied to the lease term.

Nowadays, you should view leasing companies as potential suppliers for virtually all of your equipment and other tangible business assets. You should have little trouble finding companies willing to lease or rent motor vehicles, office furniture, store fixtures, computers, communications devices, manufacturing equipment, and other items you may need.

Leasing employees is different from using temporary workers in that it generally refers to a situation where a third-party business "employs" your staff — including doing payroll withholding, administering benefits, etc. — and you pay them a fee plus expenses to do it. In many cases the leasing agency simply takes over your existing staff of permanent employees, and there's little change in the actual makeup of your staff. Leasing is usually not an option for the one- or two-person shop, since most employee leasing companies aren't interested in such "small fry." But if you have at least a dozen employees and you don't have the time or expertise to be a human resource manager, leasing might work for you.

If the major purchase you're considering is a car, truck, or some fairly standard office equipment, you may want to consider leasing your equipment rather than buying it. Leases for standard equipment are easy to arrange with suppliers and, in fact, there's a great deal of competition in that business, so you may be able to whittle down the costs even further. However, be aware that leasing will frequently cost you more in the long run.

Leasing companies, as well as banks and some suppliers and vendors, will rent equipment and other business assets to small businesses. Some manufacturers have leasing agents who may be able to arrange lease terms or a credit arrangement with the manufacturer, a subsidiary company, or a specific lessor.

If you are thinking about leasing a vehicle to use in your business and aren't sure whether buying or leasing is the right decision for you, see our discussion of the lease or buy decision for more information.

An enterprise is the related activities performed by any person or persons for a common business purpose, and includes all such activities whether performed in one or more establishments or by one or more corporate or other organizational units including departments of an establishment operated through leasing arrangements, but shall not include the related activities performed for such an enterprise by an independent contractor.

The main advantage of leasing is that your initial outlay of cash to gain the use of an asset is generally less for leasing than it is for purchasing. However, perhaps the main disadvantage of leasing is that you usually end up paying out more over the asset's life than you would have paid if you purchased the asset. How do you reconcile these two factors? Well, one way is to do a mathematical analysis of your net cash flows that would result from leasing and from purchasing.

The disadvantages of leasing your equipment and other business assets include the following: