Banks
and other financing sources tend to move
slowly, drawing out the process of application, review
... and, finally, you receive your equipment.
According
to the U.S.
Small Business Administration:
·
85%
of all U.S. companies use leasing as a
source of acquisition for some or all of their equipment.
·
89%
of those companies will lease equipment
again in the future.
·
80%
of all companies that lease find leasing
is their average-to-best means for equipment purchases
Leasing's
Top Ten
1.
Convenience
Simpler, more flexible documentation. 100% financing. Think leasing to
your
company should be a no-brainer? Can't understand how decisions can take
so
long? They don't have to.
2.
Stay
on the edge, avoid obsolescence
Buying promotes keeping equipment far beyond its useful life. Out-dated
equipment is often shuttled downstream or stored away until it is
worthless.
Leasing's built-in termination date, the lease term, can be
synchronized with
equipment's productive life.
3.
Work
with someone who understands your
business
Leasing companies that specialize in your industry can provide valuable
financial input and structure transactions that fit your specific
requirements.
4.
Pay
as the cash flows
Is your business seasonal, your business cycle predictable? Why not pay
for
that new equipment when it is paying for itself. Leasing is flexible.
Customized lease payment schedules to fit your cash flow.
5.
Fixed
rate lease payments
Your lease payments are fixed for the life of the lease contract. Fixed
payments
enable you to more accurately predict equipment costs and cash needs.
6.
Capital
Conservation
If it appreciates, buy it. If it depreciates, lease it. Traditional
bank lines
are perfect for running the day-to-day operations of a business but not
for
funding long-term equipment acquisitions. Leasing provides an alternate
source
of credit and financing more suited for depreciating assets. Don't
invest in
depreciation.
7.
Overcome
budget limitations
Your budget allows the purchase of only what you absolutely require ...
not
what your really want and need? Ask how leasing can stretch budgeted
dollars to
acquire the quality and quantity you really need.
8.
Conserve
credit lines
Leasing does not weaken your borrowing power. Lease and your existing
credit
line stays healthy and available for the unforeseen.
9.
Tax
benefits
Lease rental payments are made from pre-tax rather than after-tax
earnings.
Lease payments may be fully deductible, consult your accountant.
10.
Competitive
advantage
How can leasing help grow your business? Call us!
Types
of Leases
Fair
Market Value(FMV)
This
program is often
chosen by those who:
o
Are
interested in tax and accounting benefits that
come with off-balance-sheet payments which are considered an operating
expense.
o
Wish
to simplify asset management and reduce TCO
(total cost of ownership), syncing the lease term with the technology
cycle.
o
Use
a FMV lease's lower monthly payments to
stretch budgeted dollars.
o
At
lease's end the equipment can be purchased for
its then Fair Market Value.
$1
Buy Out
The
$1 Buyout option is
intended for customers who intend to own the equipment at lease's end.
Leasing
can positively effect a company's bottom line with such benefits as
enhanced
earnings, improved tax treatment and increased cash flow while
accessing the
best available equipment on the market. Leasing can help companies
obtain the
equipment they need today, without drawing down lines of credit or
capital
reserves. And with leasing, companies pay for the equipment as it is
being
used, so the equipment pays for itself. Equipment leasing is a proven,
valuable
financial tool used to optimize the growth and profitability of today's
business.
Term
Residual
Lease(TRL)
**The
Term Residual
Lease (TRL) acts as an option to either purchase or return the
equipment at the
completion of the Original Lease Term. Compared to a standard
FMV Lease
of 12, 24, 36, 48, or 60 months, the term on a TRL is shortened to 21,
31, 42,
or 52 monthly payments. The Lessee can return the equipment after the
Original
Lease Term or they can choose to purchase the equipment by making 3
additional
monthly payments on a 21 month term (24 payments to own), 5 on a 31
month term
(36 to own), 6 on a 42 month term (48 payments to own), or 8 on a 52
month term
(60 payments to own.) The Residual payments are made
monthly.
*Certain
state have restrictions on leasing programs - Ask your
equipment leasing
consultant.
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