Equipment
Financing
Why
You Should Consider Lease Financing Equipment Purchases:
Lease
Financing
Lease financing is probably the most popular form of financing
used by small businesses. However, it is often misunderstood
and too often rejected when it may be the best and easiest
form of financing to use. The following information will
help you understand Lease Financing and why it may be the
best alternative for you to consider.
Acquire
new equipment without tying up capital!
Whereas other types of financing usually require hefty down
payments, most lease agreements require an advance of only
one or two months' payments. Leasing is also 100% financing
and can cover the cost of delivery, installation, warranty,
etc. Your lease will include everything it takes to put
the equipment to work for you with minimal upfront costs.
Would you pay your employees in advance?
How about two, three, or four years in advance? Paying cash
for equipment that will be used over several years is like
paying an employee for years of service --in advance! Leasing
equipment is like hiring employees. You pay the employee
a wage for the work they produce during a given period.
Leasing provides the same option by letting you pay for
the use of equipment as it produces; over time.
Protect your lines of credit!
Lease payments have no impact on your credit lines with
your bank. Preserve your borrowing power for other business
opportunities. If your company is one of the rare ones that
has excess capital, leasing preserves your current cash
pool and allows it to earn interest.
Simplify your accounting!
Lease payments are little more than a line-item
in your monthly cost of operations; a minimal bookkeeping
effort that frees you from time-consuming depreciation schedules.
Realize great tax advantages!
Purchases are made with after tax dollars; you put the asset
on your balance sheet, depreciate it, and deduct the interest
portion of the payment. A properly structured lease is usually
100% deductible for most businesses and as such may reduce
your taxes. Under new tax laws, leasing can offer you tax
benefits that ownership does not. The knowledgeable people
we work with would be happy to answer any additional questions
you may have.
Lock in fixed-payments!
If you are old enough, you will remember 1980, when interest
rates skyrocketed from 9% to 21.5% in a single year. Unlike
bank lines of credit with variable rates, lease payments
are fixed for the term of the lease no matter what happens
to the market.
Eliminate obsolescence!
"The newest innovation" doesn't stay new. Leasing
gives you today's best technology and then lets you upgrade
when the equipment has outlived its advantage. You can eliminate
the hassle of selling equipment at a severely depreciated
value
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Frequently
Asked Questions about Lease Financing:
What
is a lease?
A lease is a simple agreement between the owner (Lessor)
of the equipment and the user (Lessee) of the equipment
covering the use of the equipment for a monthly fee (rental).
Why is a lease different from a loan?
A loan is money you rent in order to own equipment. Interest
on a loan is the charge a borrower must pay for the use
of a lender's money. With leasing you are not "renting"
money. You are "renting" (leasing) equipment so
you can use it to generate a profit for your business. Because
of the fundamental difference, an interest rate (APR) normally
associated with borrowing money does not apply to a leasing
transaction.
Should every business lease?
It depends on the business. A growing business is apt to
face the dilemma of limited cash flow and the need to add
equipment. Leasing can put that equipment to work for you
with real cash-flow advantages and without a major capital
investment. Established businesses looking to upgrade older
equipment may be more concerned with the various other advantages
leasing has to offer. Leasing shouldn't be over looked because
you can't get straight answers from inexperienced leasing
individuals. Many businesses don't consider leasing because
they don't understand how it can benefit them. Our knowledgeable
financing company representatives will answer any of your
questions.
What
is the most important benefit of leasing?
The use of the equipment: Operating profits come from the
use of the equipment, not ownership of it. CLEANING SYSTEM
SPECIALISTS (CSS) will provide you the latest and best equipment,
allowing you to work faster, better and cheaper than the
competition. Leasing gives you the advantages of leading
technology at an affordable cost and gives you many of the
benefits of ownership without the capital outlay.
Is there any advantage to outright ownership?
While it's true that some companies with excess cash may
find benefit to an outright purchase, most companies hesitate
to invest in depreciating assets. Since the elimination
of ITC and other changes in tax law, ownership advantages
have diminished considerably. In this day and age it isn't
good business sense to make the commitment to ownership
when the future (technology and business) can be so uncertain.
Conserve your cash and leave your options open. Let Willamette
Financial Services show you how easy it is to lease it!
Can leasing improve cash flow?
Yes. By leasing your equipment you conserve cash and maintain
existing credit lines. If you use cash or borrow from existing
credit lines to buy equipment, you tie up valuable working
capital that is needed in other areas -inventory, advertising,
personnel costs, etc.
Summary
Whatever your equipment needs CLEANING SYSTEM SPECIALISTS
(CSS) can assist you. Call or email us today and we'll be
delighted to discuss all our financing options with you.
Please feel free to fill out our credit application online
and we'lll contact you within 48 hours to discuss your business
plans. All information provided is held in the strictest
confidence and will not be shared with anyone.
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