Why a capital lease as opposed to a loan? There are many additional benefits, specifically:
- Tax Benefits: Our lease allows you to expense your new equipment, rather than capitalizing and depreciating it.
- Predictability: Our lease payment is fixed for the term, not floating with the prime rate. And since our rates are lower NOW than they have been for years, NOW is a good time to ‘lock in’ a low monthly payment on your equipment.
- Ease of approval: For clients with good credit, we can approve up to $100,000, based on a 10-minute application which you can complete by phone, fax or on-line. No financial statements or tax returns required.
- Speed of approval: Typically we can approve your lease in 24 to 48 hours. (If your bank and trade credit references cooperate, we can approve $100,000 in as little as a few hours!)
- Easy accounting: Our leases provide equal monthly “rental” payments and can be accounted for just that easily. You don’t have to calculate monthly principal and interest amounts.
- Leasing keeps your bank lines available for other purposes. Remember that if you use $25,000 of your $50,000 (or $100,000) bank line of credit to acquire additional business equipment, you don’t have $50,000 (or $100,000) of available credit at the bank anymore.
- Leasing doesn’t interfere with future borrowing: Our leases are typically shown as an expense — an operating cost of doing business — much like your office or shop lease, or your payroll costs. Bank loans must be reported as liabilities and can adversely affect your balance sheet financial ratios. The lease won’t usually have the negative effect on your balance sheet that a loan or debt would.
- No down payment: Most commercial term loans will require a down payment of 10 to 25%, PLUS sales tax, delivery & installation charges paid up front. With our lease, we can usually include all of those costs and you pay nothing more than 1 or 2 month’s lease payment and a small documentation fee to acquire your equipment.
- AND one more IMPORTANT difference: Have you asked your banker for a loan lately? Unless you can prove that you really don’t need the money, they just don’t seem to be as interested in making the loan as they used to.