Benefits of Equipment Leasing
Ease of credit approval, fast funding approvals and tax benefits are the key reasons companies choose equipment leasing. Businesses can grow without significant out of pocket expenses.
New or used equipment is more affordable
Less up-front capital is needed
Generally, the equipment is the only collateral
Conserves working capital
Excellent alternative to bank loans which often include loan fees
Preserves lines of credit for consumables and working capital
Leases can be structured to meet individual needs
Preserve Your Cash and Bank Line of Credit
Leasing permits the acquisition of depreciable assets without reducing either cash liquidity or available credit lines. Thus using leasing to acquire operating assets conserves the credit lines that will finance the inventory and receivables supporting those assets.
Leasing Provides 100% Financing:
You can finance up to 100% of the equipment cost. Leasing typically requires just a first and last month’s payment rather than a large down payment. In many cases service, supplies, installation, warranty and other soft costs can be included in your lease. With a lease, your up-front expense is typically limited to one or two monthly lease payments.
Cash Flow
Monthly payments allow you to pay for your equipment with the improved cash flow generated from your increased capacity or new technology.
Flex-Pay
Seasonal and up to 90-day deferred payment options are available to help you minimize the impact of cash flow fluctuations that are project-based, seasonal, or related to expansion.
Leasing is Convenient
Acquiring a lease is often easier than using other financing sources, especially SBA loans. Equipment leasing is an alternative form of financing designed specifically for capital equipment. Using this financing option will help you maximize liquidity and access to capital by preserving your cash and bank lines for other business needs.
Fast & Efficient Service
In most cases, Capital Equipment Leasing can approve leases for up to $75,000 in equipment with a one-page credit application. Approval can usually be secured in 4- 24 hours. For sales over $75,000, we can typically give you an approval in 48-72 hours, if we have a complete finance package.
Leasing Lets Productive Assets Self-Finance
Because leasing involves payment over time and the assets being financed are either producing income or reducing expenses, those same assets generate the cash needed to make the lease payments. This is the classic benefit which has sustained the leasing industry over centuries. .
Leasing Provides a Comprehensive Financing Option
Businesses acquiring equipment from a number of sources often use leasing to consolidate all those different items into a single lease with one monthly payment. This is common when companies relocate and consequently acquire new furniture and office equipment from a number of different vendors.
Leasing Means Fixed Rates
Lease rates almost always fix when the lease begins thus protecting the lessee from inflation risk. In an inflationary environment, the lessee has the benefit of acquiring equipment at current prices and paying for it with tomorrow's depreciated dollars.
Leasing Facilitates Budgeting
Because payments are fixed, they can be accurately projected over the term of the lease.
Also, when immediately desired equipment cannot be accommodated in a company's current capital budget, it often can be acquired through a lease which impacts only the operating budget.
Leasing May Provide Tax Benefits
Lease rental payments are made from pre-tax rather than after-tax earnings. Leases can be structured so lease payments are fully deductible. The cost of leasing is a business expense, and is therefore tax deductible for the life of the lease. This is usually shorter than the normally allowable depreciation schedule, thus providing a faster write-off. In most cases, the tax benefits of a lease transaction are more beneficial to a company than an outright purchase.
Secured Lending vs. Lease Financing
A LOAN is a financing agreement that allows a business to acquire, use and own equipment.
A loan may require a down payment or a pledge of other assets for collateral. Under a loan financing, the borrower remains the owner of the equipment for tax and accounting purposes.
A LEASE allows a company to acquire and use equipment while conserving its cash flow and lines of credit.
Leasing also provides a new source of credit with the added benefit of being able to expense your lease payments in most instances. Leasing also can protect against equipment obsolescence when upgrades are included in a lease contract or the equipment is returned to the lessor at the end of the lease term.