Effects of Lease Options as a Source of Finance on the Profitability Performance of Small and Medium Enterprises (SME'S) in Lagos State, Nigeria

Abstract

Over the years, the concept of leasing has been an element of serious decision for corporate organizations globally and it has been argued that leasing contribute to the growth of businesses. As such, this study is to ascertain the effects of lease option as a source of finance on the profitability performance of SME's and whether lease option has a relationship with the output of organizations. A cross sectional survey research method with the usage of questionnaire instrument is adopted using a multi-stage random sampling population of 300 respondents who are managers of SME's in Lagos State. Data were analysed using frequencies and simple percentage. The hypotheses were tested using Analysis of Variance and correlation analysis. The study discovers that lease option so far has positively affected the profit of the SME's. Also that lease option have relationship with organizational output of the companies. The study recommends that leasing companies should come up with leasing solutions that SME's can easily afford as
to increase productivity and also increase the Gross Domestic Product of the
economy and that SME's should endeavour to adopt the best financial structure to run their businesses thereby transforming the nation.