Posts Tagged ‘Leasing’

You can tell a newcomer to the business world (or someone without much experience) by the way they start investing in new equipment heedlessly. A veteran (or someone who has a much more experienced business person to guide him) would know that there are times when you can resort to Business Equipment Leasing instead to save on money that could go further when spent on other needs of the business instead.

Business Equipment Leasing is like other forms of equipment leasing in that you lease your equipment from the owner (or lessor) in exchange for paying for them during the time you are leasing the equipment. You, the person borrowing the equipment, are the lessee. One common type of Business Equipment Leasing is called Office Equipment Leasing. The excellent point about Business Equipment Leasing is that it allows you to use the business equipment for the term of the lease, then use any money you have at the end of the lease to either lease more up to date business equipment or buy your own business equipment outright. Business Equipment Leasing is often much cheaper than renting equipment. In Business Equipment Leasing, the arrangements you make with the owner could also include an option to buy the equipment you are leasing once the terms of your lease are up.

To pursue Business Equipment Leasing, you might want to use the services of a Business Equipment Leasing broker. This Business Equipment Leasing broker is responsible for submitting and monitoring the submission of your requests for Business Equipment Leasing to lenders like banks. It is not the Business Equipment Leasing broker who will provide funding – he simply acts as a middleman. If you have time on your hands and want to save money, then you can bypass the Business Equipment Leasing broker altogether and head for the Independent Lessor instead.

An Independent Lessor would be the diversified financial company that provides Business Equipment Leasing straight to business owners like you. Examples of such diversified financial companies are banks as well as Business Equipment Leasing specialists. Many times, since small business owners are already well connected with banks, these are the companies that act as Independent Lessors to small businesses that need Business Equipment Leasing or that the small business owners turn to first.

If you are not interested in buying the equipment you lease after the term of the lease has been completed, then always opt for a small-term lease at the onset. Sometimes this is excellent because some business equipment (particularly computers) become obsolete honestly quickly so you don’t want to be saddled with this ancient equipment which you will find useless soon after. If you can get a lender that offers Business Equipment Leasing with an upgrade stipulation built into the contract that would benefit you because it means the cost of an upgrade has been factored in. Your ancient equipment gets an upgrade and business continues for you and your lessor after the upgrade has been implemented. Everyone wins.

by Tom Williams
Savvy business owners who choose to lease business equipment can save themselves hard-earned cash, accumulated debt, and industrial-strength headaches by optimizing their relationships with lending entities.
Customers who are looking to lease equipment for their business most frequently seek financing from one of two sources – traditional bank financing programs, or specialized leasing companies like eLease. The following are four key differences to consider when comparing these programs.
1. Interest Rate Fluctuations In a healthy economy, banks often choose to offer equipment leasing as a service for their business clients. In this way, banks foster economic growth in local communities by supporting expansion in growing industries. But, banks are not in the business of taking risks, and because of this, their programs are subject to change as current economic conditions falter. An example of this is interest rates. Consistent with their conservative risk philosophy, banks do not entertain risk with interest rates. Typically, bank lines fluctuate on the Prime Rate — as the Federal Reserve raises or lowers the rate, so will your interest payment increase or decrease. These economic fluctuations can have financial impact on your business outside of your control. The opposite is right for leasing companies, because they take 100% of the interest rate risk. Therefore, when industry rates decrease or increase, your lease payment stays the same. The payment on a lease will never change during its term regardless of interest rates and inflation. You know what you are getting from day one.
 
2. Impact on Additional Financing The way that your financing source reports your leased business equipment with the Secretary of State can directly impact your ability to obtain additional financing for your business. When your business equipment is financed by a third-party leasing company, that company files a UCC (Uniform Commercial Code) which specifies to the Secretary of State where the customer is located, and that the leased equipment is owned by the leasing company. For example, if your business makes the choice to lease an oven for your new restaurant, a leasing company would designate the oven itself as collateral. In comparison, all property owned by the business is stated when a bank finances the lease. A Blanket UCC is usually filed, which includes the equipment as well as all assets. Therefore, not only would the oven for your new restaurant be considered collateral, but so would your entire business. When a blanket UCC is in place, other banks will not want to provide overlapping financing with another lender. If, but, your financing is provided through a third-party leasing company, other lenders will see that only equipment is under consideration, and be favorable to loan financing because they will be able to Blanket UCC the rest of the business.

3. Access to CapitalBoth banks and leasing companies evaluate exposure (the total amount of debt taken on by a company) when considering whether to offer financing. The difference in the way these entities look at total debt can have significant influence on their choice to finance your equipment, as well as other financed assets. In most cases, banks have a borrowing threshold with a borrower. This may include the line of credit on the home, auto loans, credit cards, business debts and personal mortgage. If you get into an amount of debt that the bank sees as a risk, they may choose to end business with your company. Or, they may refuse you financing due to how much debt your already have. Leasing companies deal with the same issue, but only consider the equipment financed for that customer. So, by using a third party leasing company, you can retain access to capital with your banker without tying up credit lines. A business can never have too much access to capital!
4. Flexibility in TermsMost banks are highly structured and cautious in their leasing terms. Frequently, they require 10% to 20% down to finance equipment for a business, with a requirement of security such as a minimum amount in a CD, or reserve in a checking account. While the primary objective of a bank is to protect its interests, a leasing company’s main goal is to generate cash flow. Therefore, leasing companies are highly creative in finding the simplest way for a business to get new equipment. It is not uncommon to terms that include seasonal payments, or no payments for 90 to 180 days.
 
In summary, a excellent rule of thumb is to use your bank for working capital, and equipment finance companies to finance equipment.
 
 

Construction Equipment Leasing is a type of leasing arrangement where a small business owner (like you) want to get Construction Equipment but at a lower cost than when you buy the Construction Equipment yourself. It falls under the broader category of Equipment Leasing which means that the equipment you want to lease is probably very expensive (and Construction Equipment are extremely expensive) but you cannot rationalize buying the equipment because you might need the equipment only for the small-term or you lack the capital for outright buys.

The usual lease period for Construction Equipment Leasing starts at the 24-month term and could last as long as a 48-month term. Usually, Construction Equipment Leasing will not require you to make a hefty down payment though you may be required to give a security deposit of some amount. This allows you to use more of your cash flow for your business needs and to save up. But, for long-term purposes, it is not advisable to use the Construction Equipment Leasing option – rather, a cheaper option for the long-term loan option is bank financing itself. Construction Equipment Leasing is ideal for small-term needs only.

Construction Equipment Leasing may fall into three main categories – namely the capital lease, the operating lease, or the skip lease. The capital lease (also called a finance lease) acts like a regular loan and will last about as long as the actual lifespan of the Construction Equipment. If the Construction Equipment is in excellent working condition at the end of this lease term, the capital lease allows you to take advantage of the stipulation to buy the same Construction Equipment you have been using for your company. The operating lease (also called a right lease) lasts shorter than the life span of the Construction Equipment and will usually use up less of your business cash flow. You may find payments for the operating lease to be tax deductible (but you’ll have to check the agreement you are entering if this applies to you. ) A skip lease is ideal for any seasonal business where income usually flows in only during specific months in the year (rather than year-round like other businesses. )

When it comes to Construction Equipment Leasing, you may get yourself a better deal if you go straight to the Construction Equipment manufacturers. The larger business finance institutions are also known to do this more commonly than the smaller ones. The best way to find this option is to go online and look for any links to “leasing options. ” As with any financial transaction, do not snatch up the first offer you get. Rather, try to look around the market and see if there are any Construction Equipment Leasing companies that can give you a better deal under the same leasing terms. It is equally vital to find out if you are in for any tax breaks if you pursue Construction Equipment Leasing for your company. This can be confirmed by your company accountant.

Advantages of Truck Leasing Vs Purchasing

Truck leasing to get that truck equipment you need today instead of purchasing, can be a cost-effective option, particularly if you don’t have ready cash on hand. The same acquisition rationale applies to all heavy equipment. Along with being able to regulate your cash flow more effectively, truck leasing offers these additional advantages:

Asset Management ** A truck equipment lease provides the use of equipment for specific periods of time at fixed payments. Depending on how the truck lease is structured, the lessor assumes and manages the risk of equipment ownership. At the end of the truck lease, the lessor is responsible for the disposition of the asset.

Balance Sheet Management ** Because an operating truck lease is not considered a long-term debt or liability, it does not appear as debt on your financial statements, thus making you more attractive to traditional lenders.

Current Technology ** If the nature of your industry demands that you have the latest truck technology a small-term operating truck lease can help you get the needed equipment and keep your cash out-lay to a minimum. Your risk of getting stuck with obsolete equipment is lower because you can upgrade or add equipment to meet your ever-changing needs.

Customized Payment Solutions ** A variety of truck leasing products are available, allowing you to tailor a program to fit your month-to-month or year-to-year cash flow needs. Some lessors offer stepped- payment programs, with the payments being smaller at the beginning of the lease to allow the lessee’s cashflow to build. The payments then ramp up latter in the payment schedule when the new truck(s) have increased the business revenue. Other lessors offer seasonal deferred payment programs for businesses that experience cashflow challenges during the year. Always question for these options. Independent lessors want your business. If it makes sense financially, they will often accommodate your needs.

Flexible End Of Term Options ** There are several options for disposing of equipment after the lease term ends including returning the equipment, renewing the lease or purchasing the equipment.

Flexibility ** As your business grows and your needs change, you can add or upgrade at any point during the lease term through add-on or master leases. Lessors want you as a long term customer and are often creative in how they structure a truck lease for you. Captive or in-house truck leasing programs may not be as flexible. So, you can often find more flexible truck leasing arrangements with Independent Truck Leasing Companies.

Immediate Write-Off ** Truck Lease payments can be treated as expenses (depending on how the lease is structured) on a company’s balance sheet, therefore, truck equipment does not have to be depreciated over five to seven years. (Consult with your tax professional prior to making major asset acquisition decisions)

Improved Cash Forecasting ** By leasing need truck equipment you know the amount and number of lease payments over the life of the leasing period, so you can accurately forecast cash requirements for your equipment.

Tax Benefits ** The IRS does not consider a truck operating lease to be a buy, but rather a tax-deductible overhead expense. Therefore, you can deduct the equipment lease payments from your corporate income. (Consult with your tax professional prior to making major asset acquisition decisions).

Robert (Jake) Jacobs is a Business Financing Consultant specializing in Asset Based Business Financing. Truck Leasing and Heavy Equi0pment Leasing is a core competency of services offered. He can be reached at. . . 800-313-6433.

E-mail- capitalwise@aol. com.

More information at. . . http://need-leases. askjakefor. info

Obtaining the fixed assets for a period of time is what leasing is all about. There is hiring leasing and finance leasing. While we talk about broadcast or audio visual equipment leasing we would usually refer to hiring leasing. Talking about leasing it is vital to know that lessee is the person who takes the equipment or any other property into lease and lessor is the person who is into the business of selling or leasing of the equipment. There could be various reasons why one can go for audio visual equipment leasing. The prime among them could be related to the asset management. When you hire equipment for a specific time frame, the equipment stays with you for that time at fixed payments. The risks of equipment ownership is assumed and taken care of. When we are talking about equipment finance leasing it gives the lessee the purchasing power to buy additional equipment. The most vital reason why people go for leasing is there is no down-payment required for getting the equipments under lease. One of the other major advantages of lease is that it provides you with complete finance and favorable terms and conditions than the traditional loaning systems. With leasing you are also entitled for some major tax benefits. Tax benefits could be grabbed by you when you are leasing the equipments because, leasing would be deemed as periodic rental expense which would be deduced from the tax that you are supposed to pay. But if what is being shown as lease is not a lease but provisional sale or repayment of the installment, you are not entitled for the tax benefits. Hence, it is vital to know the difference between leasing the equipment and purchasing it. Best of the best equipments and offers are made at minimal expenditure. This is the downright benefit of leasing. With equipment leasing you become immune to inflation. The amount which you have to pay to the lessor is fixed and will not change as the market changes. But one has to be very cautious with the wear and tear. This has been one of the major concerns in the leasing because when you take any equipment for lease, you are responsible for the wear and tear of the equipment. So you should question the lessor about the prior maintenance of the equipment. You should also read the leasing deal document watchfully. Evaluate the points like the monthly budget you can afford and if the equipment will last till the lease term or you would have to make the repairs in the middle of the lease period, out of your own pocket? If you are looking for a super cheap deal then prefer the small term period offers. Do your own R&D before leasing any equipment. There are online leasing firms online and offline. Research properly, evaluate the entire thing on the basis of the parameters discussed above and go for it. Audio visual equipment leasing caters to the immediate business requirements of yours. What more could one question for?