High
Falls Funding Leasing
Solutions
Leasing
has become the principal method of acquiring equipment among
businesses. Over 80% of American businesses lease at least some of
their equipment and nearly 90% say they would choose to lease
again.
Leasing works for any type of business.
Virtually all types of businesses and organizations lease equipment, including proprietorships,
partnerships, corporations, government agencies, religious and
nonprofit organizations.
This type of lease
, also called "Fair Market Value" or "True
Lease," offers the lowest
possible lease payment. At the end of the lease, the purchase option
will not exceed the fair market value of the equipment. For those worried about obsolescence, this plan offers the most
options both during and at the end of the lease term. This plan is
particularly beneficial to those wanting a small security deposit
and a relatively low monthly payment. At the end of the lease
term, the lessee has three options: extend the term of the lease,
return the equipment, or buy it at its fair market value. A True
Lease allows the most cost to be deferred to the end of the lease
when a decision to retain or upgrade the equipment can be made.
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Advantages |
These leases have a buyout clause at the end of the term. True
operating leases can be 100% tax deductible. This means that all
monthly payments can be written off as an expense and the
equipment does not need to be depreciated over a term of years.
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NON-FULL
PAYOUT LEASING
With
this leasing model, also called "Residual Value
Leasing", not all the original cost of the asset is paid back
over the contract term. The lease payments are calculated in a way
that a residual value will remain open as a purchase price at the
end of the lease.
10%
Percent Fixed Option - At the end of the lease term the customer
may either exercise a fixed option of ten percent of the original
equipment cost, return the equipment to the lessor or the customer
can continue to lease the equipment.
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Advantages |
Lower payment, fixed option amount, flexibility on buying or
returning equipment at the end of the lease.
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One
Dollar Option - This is a financing arrangement, or capital lease,
for those who are fairly certain they wish to purchase the
equipment at the end of the lease term, title passes to the lessee
for $1.00 at the end of the lease.
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Advantages |
Typically,
$1.00 out leases are considered capital leases. This type of lease
is very similar to a financing agreement, meaning that payments
are similar to a bank loan. Lessee
retains depreciation rights, good when useful life of equipment
exceeds lease term, possible same year 100% expensing for small
businesses.
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Your pre-existing capital asset
is sold, and then leased back to you, thereby increasing cash flow.
Sale and lease back type leases can take the form of True Value
Leases or Residual Value Leasing.
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Advantages |
Continued
Use
- The equipment stays on your property and you continue using it
to generate revenue.
Flexibility - The money derived can be used for any purpose
whatsoever.
Tax Benefits - Recover up to 37% in tax savings. By being
set up as a true lease transaction, the entire monthly payment may
be 100% tax deductible.
No Other Collateral is Necessary - Unlike traditional
lending institutions that require personal assets and all of your
business assets, we only use business equipment.
Balance Sheet Benefit
- Having assets, on which you pay
taxes, converted into contingent liabilities may also lower taxes.
Conserve Lines of Credit - Your lease payments do not at
all interfere with credit lines at your bank, allowing you to
conserve these funds for other critical commercial business needs. |
Save
Time - Get Pre-approved. Don't wait until you need a
lease to contact us. Depending on your company size,
history, credit, and financials, equipment lease approvals can
take a week or more in some cases, particularly in Canada.
Contact us when you begin shopping for equipment that you intent
to lease, and we can get you pre-approved for a lease up to a
ceiling figure. That way, you can shop with confidence
knowing that you can take delivery of the equipment quickly when
you are ready to move forward. Showing a pre-approval letter
to an equipment supplier can also help your negotiating position.
