Benefits of Leasing
100% financing – When financing through a lease, all soft cost can be covered, including software, installation, shipping and training
Obsolescence protection – Leasing lets you match the term to what you perceive to be the equipment’s useful life. Leasing allows for upgrades and trade ups when new technology becomes available.
Low up-front cash requirements – With leasing, cash outlays are minimized. Most traditional financing options require a sizeable down payment, usually 20%. Leasing requires no down payment, only the first and last monthly payments are due at signing.
Advantageous tax treatment – Some leases allow 100% of the customer’s monthly payment to be deducted as an operating expense. This reduces the net cost of the lease. It is always a good idea to talk this over with your tax accountant to determine eligibility.
Simpler than bank loans – Leasing programs and procedures are specially designed to take the red tape out of financing capital equipment for business.
End of lease options – Leasing provides an option for business owners. You can either purchase the equipment at a stated amount or for its Fair Market Value (FMV). Our typical end of lease options: $1.00, 10%, or FMV. This gives you the option to own the equipment or simply return it.
Easier cash flow forecasting – Leasing helps an equipment user fit a monthly payment into their budget. Because payments are fixed, users can continue to intelligently budget into the future.
Leasing provides sales/use tax deferral – The sales/use tax is paid over time as the equipment is used as opposed to upfront with an outright cash purchase. This can result in a substantial cash savings in the first year of the lease.
Section 179 Tax Deduction – Many people are confused on what this really is but its pretty simple. The Section 179 of the IRS Tax code allows small businesses to deduct the purchase amount of financed during the tax year. We recommend you consult your business accountant or the IRS but we often see businesses using this deduction.