Equipment Leasing as an Alternative Means of Financing Small and Medium Enterprises in Delta State, Nigeria

Abstract

This study was carried out to investigate equipment leasing as an alternative
means of financing small and medium scale enterprises. Although, leasing is
anchored on the business philosophy that profits are earned through the use – rather than the ownership of equipment and asset, yet, many operators of small and medium scale enterprises are yet to maximize their potentials. A set of structured questionnaire was used as the instrument for data collection and administered to 100 operators of small and medium enterprises in Delta State, Nigeria randomly selected from the population 95% confidence level. Data analysis was made and the hypothesis formulated was tested using the Pearson Moment Correlation Coefficient at 0.05 level of significance. The study revealed that many operators of small and medium enterprise do not assess lease option and that affect their overall performance. The researcher concluded that equipment leasing has a significant effect on the profitability of small and medium enterprises and recommended that leasing companies should improve their rates by reducing rents on leasable equipment so that owners of small and medium scale business can benefit more from this form of finance option.