Category Archives for equipment leasing
Equipment Leasing | 6 Reasons To Consider Equipment Lease Financing
There are numerous reasons to consider equipment lease financing in your business, but for the sake of brevity, we’re only going over the most common reasons we find that business owners and managers utilize equipment leasing.
Deferral of Tax.
When you purchase an asset, you are required to pay the respective sales taxes at time of purchase. With a lease, the leasing company is the owner of the asset at time of purchase, so they pay the sales tax. You pay sales taxes on each lease payment, deferring your tax liability years into the future.
Longer Terms
As compared with equipment loans which tend to run around 36 months, equipment leases are more readily available for terms of 5 years and beyond, depending on the asset, age, and condition.
No Down Payment Required.
In many cases, the leasing company will only ask for one or two payments in advance, greatly reducing the drain on cash flow.
True 100% financing
Unlike traditional equipment loan products, most lease programs will allow you to include the costs of installation and freight into the lease financing total, once again saving on your out of pocket costs. The ability to finance these “soft costs” can be the difference between making the capital investment or not.
Streamlined Process
Because the lease company owns the underlying asset and specializes in financing the asset type, there is considerably less red tape to go through in the application process. And for smaller ticket items, approvals can be accomplished in a matter of hours with very little paper work involved. More support is required for larger purchases, but compared to a traditional bank application the degree of complication and time required pales in comparison.
Conserve on cash.
In addition to the cash saving features mentioned above, most leasing companies will allow you to purchase an asset for cash and then turn around and sell it to the lease company in return for an equipment lease. There may be times when you can get the best deal with a cash purchase. And sometimes a great deal may not be around before you get financing approved. So this sale and lease back process puts cash back in your hands after the transaction has been completed, allowing you to take full advantage of a cash transaction.
In some cases, you may have even had to use your line of credit to buy the asset in the time you had to work with. Similar to the above cash purchase, the acquired asset can be sold to the leasing company in return for an equipment lease with the proceeds from sale being used to bring your line of credit back down and making the funds available for other operational requirements.
If you’d like to get more information on equipment leasing, please give us a call and we’ll get all your questions answered.
Five Tips For Equipment Leasing Success
If you’re looking for equipment leasing for assets you’re trying to acquire or refinance, there are some important things you need to know before you begin. Just follow these five tips for equipment leasing success
1. An important factor before you start to apply for equipment leasing is making sure that you thoroughly understand your application profile that leasing companies will be looking at. The reason why this is important is because not focusing on relevant lenders that fit your application profile from the start may doom your overall equipment leasing efforts. If you don’t have an up to date understanding of your application profile to focus your equipment financing search, then you run the risk of automatic declines, damage to your credit report, sub optimal lease rates and terms, or even worse, no funding offers at all.
2. Another important consideration for securing equipment leasing is to work with a highly experienced financing specialist or equipment leasing broker. It’s critical to seek out the services of these professionals for two reasons. First, many leasing companies exclusively work through brokers, so you will not have full access to the total market without broker assistance. Second, a good broker knows how to not only package your application information for best results, but also knows how to manage the leasing companies bureaucracy that can get in the way of both approvals being issued and funding getting in place. If you make sure that you’re working with a knowledgeable professional, then you’ll have greatly increased your chances of success.
3. If You don’t have a recent copy of your personal credit report and business credit report, then you should go on line the major credit reporting agencies and access your credit history and score for a small fee. Alternatively, you can get your personal credit report for free from each of the credit reporting bureaus, but this will not include your credit score and it can take several weeks to receive the information in the mail.
The first thing a lender will review on your equipment leasing application is your credit report. Therefore,its important that you understand what it says so you can focus on either A, B, or C lenders, depending on your credit, and also to be able to proactively explain any mistakes or negatives that appear in your credit report.
4. Instead of complicating your equipment leasing efforts by sending in incomplete or hard to read application forms, try completing a rough copy of the application, making sure that you clarify anything you’re not clear on. Then, once you feel confident that the information is both accurate and complete, get someone with better handwriting to rewrite the application on a blank form. In fact, simplying providing complete and easy to read information, can actually increase your probability of success.
5. If you have only average credit, consider adding an additional consignee to your application form to strengthen your equipment financing profile. It’s not as difficult as you might think and may be as simple as getting your spouse or a business partner to also sign the application. What you need to do is make sure their credit is above average and include them on the application. If your credit is poor or really bad, you may want to keep yourself off the application all together.
So if you really want to secure equipment leasing, follow these tips to get the process working for you, saving time and potentially a considerable amount of money through locating and securing the most relevant equipment leasing for your business scenario.
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