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Explore the Benefits
Equipment Leasing

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

  • 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.

  • 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 East Bay Factors... TODAY!

Member IACFB
International Association of Commercial Finance Brokers

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