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Equipment Leasing
The tax benefits of equipment
leasing can be extremely important to cash flow and this is
exceptionally true for young companies. In addition to
conserving working capital and credit lines by leasing equipment
rather than paying cash, "true" leases may be fully expensed and
accelerate deductions when compared to standard lengthy depreciation
schedules.
Reasons
to Lease Equipment
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No Down Payment...Most
traditional equipment financing options require a sizable down
payment. On cash purchases this can be 20% or more. No
down payment is required on an equipment lease.
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Flexibility...Equipment leasing
provides the lessee with greater structuring flexibility and many
transactions are "custom structured" to fit the needs of the
customer.
-
Fixed Payments...Monthly payments
on an equipment lease are generally fixed for the entire term of the
lease. This is a distinct advantage of many floating-rate
financings methods offered by banks.
-
Easier Underwriting...Equipment
Lease programs and underwriting procedures are designed to limit the
"red tape" in financing.
-
Additional Lines of Credit...When
equipment is purchased with borrowed funds, available credit lines
with your lender are reduced. When equipment is leased, bank
lines of credit remain intact and a new line of credit is created
with the lessor.
-
Soft Costs Covered...In many
cases, soft costs such as tax, shipping, installation, training, and
software are seldom covered with a typical bank loan. Leasing
is often 100% financing and can cover such expense.
-
No Blanket Lien...When banks lend
money for equipment purchases, they usually take a security interest
in "all assets" of the business. This drastically limits the
available options for financing such things as accounts receivable
and inventory with another lender.
-
Credit Review Process...The
process for credit review at most banks can be long and tedious and
this is certainly the case in today's credit impaired economy.
Leasing usually takes 24 hours or less for an approval.
For additional information on how
equipment leasing can benefit your business,
contact the professionals
at Naples Factors TODAY!
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Member IACFB
International Association of Commercial Finance Brokers
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