|
Why are 80% of U.S. businesses, from the Fortune 500 to the local family business, leasing a portion of their depreciable assets?
Leasing is an extremely flexible tool. It can be structured as anything from a rental (think "car rental") to a time purchase (think "lease to own"). For this reason, there are many different benefits of leasing and an equal number of motives as to why people lease.
Free up capital:
Most types of financing require down payments of up to 25%, whereas
leasing covers 95% of the cost of the equipment. Most leases require
only one or two payments in advance. Get immediate use of the equipment
with minimal up-front cosr and pay for the equipment as income is
earned from its use.
Keep your business' cash for future needs, unexpected expenses or working capital when revenues are low.
|
Off Balance Sheet:
Equipment leases can be structured for "off balance sheet accounting"
(operating leases), which improves your company's ratios and protects
against lending covenant violations. |
Low monthly payments:
The monthly lease payment will usually be lower than the payment required by other methods of financing.
|
Simplify Your Accounting:
Leasing eliminates the need for complicated depreciation schedules since lease payments are generally line item expenses on your P&L statement.
|
Eliminate obsolescence:
Technology is changing at a rapid fire pace. What meets your business' needs today may be obsolete three years from now. Leasing allows you the flexibility to maintain a competitive edge by giving you today's best technology then allowing you to upgrade when the equipment has outlived its advantage.
|
Fixed payments through the term of the lease:
Unlike bank lines of credit that usually have variable rates, lease payments are fixed no matter what happens in the market. By choosing to lease you won't be a victim of skyrocketing interest rates. Remember the 80's when rates rose from 9% to over 20% in one year? That can't happen with leasing.
|
Significant tax and accounting advantages:
And since lease payments can usually be treated as a pre-tax business expense you may even reduce your taxes. Paying cash for equipment automatically adds 30-40% to the cost when you realize that cash = profits and taxes are paid on profits. Leasing is the right choice! It minimizes demands on cash flow, eliminates obsolescence, keeps your bank lines open, saves on taxes and shelters you from the market
|
Smaller Initial Investment:
While you still must come up with some cash for application and set up fees, it's still significantly less than a large equipment purchase or the costs of securing a bank loan.
|
Better financing options:
Don't need a lengthy (or strong) financial history to get a lease. This is very important for the newest of businesses that might be very credit worthy, but haven't been around long enough to establish themselves.
|
Increased purchasing power:
Use your resources more effectively to get high-quality equipment and furniture you may not be able to afford outright.
|
Convenient:
We do not require blanket liens, business plans, audited statements, cross collateralization or many of the other demands traditional financial lenders put on businesses.
|
Up to 95% Financing- Plus Soft Costs!
Leases can cover everything you need to make your equipment work for you. This includes software, installation, related leasehold improvements, training and even some supply items. All of this reduces your initial costs to minimal levels, letting you earn profits from your new equipment faster.
|
|
Equipment Leasing 
