100% Financing: Allows you to acquire needed equipment without a major initial cash outlay.
Use vs. Ownership: The value of equipment is in its use, not its ownership. Financing enables you to pay for the equipment with future proﬁt instead of working capital.
Tax Advantages: Maximize your tax beneﬁt this year IRS Section 179 (see Tax Beneﬁts). Alternatively, lease payments may be fully tax-deductible as an operational expense (Fair Market Value Purchase Option). Please consult your tax accountant.
Affordability: Financing results in low monthly payments, and the equipment can be purchased for a nominal cost at the end of the lease term.
Overcome Budget Limitations: Avoid Capital Budget constraints which would ordinarily delay or prevent the acquisition of equipment. Leasing ﬁnancing can mean quicker budget approval due to its small monthly expense.
Fixed Monthly Payments: Fixed payments avoid the uncertainty of variable (ﬂoating) interest rates typical of bank ﬁnancing. This gives you more consistent control over equipment expenditures and provides protection against inﬂation.
Cash Conservation/Liquidity: Lease ﬁnancing preserves working capital, freeing up cash ﬂow and bank credit lines for nonequipment uses like operating expenses, investment opportunities, emergencies, or cash reserves.
Sales/Use Tax Deferral: With lease financing, sales tax is paid over
time with the monthly lease payments, rather than paid in full at the time of purchase. This can result in substantial cash savings in the first year of the lease.
Better Terms and Structure than Banks: Most bank loans require larger down payments, compensating balances, additional collateral, or restrictive covenants. They may tie the ﬁnancing to a ﬂoating interest rate. Equipment leasing has ﬁxed payments, ﬂexible schedules, low down payment, and does not require extra collateral. Also, banks can put liens on all of the assets of your company including receivables and inventory, while leasing companies only put a lien on the equipment being leased.
Eliminate Equipment Obsolescence: Equipment leasing provides ﬂexibility and protection against equipment obsolescence with the ability to upgrade equipment.