June 26, 2017

Equipment Leasing

​100% Financing

100% Tax Deductible

Improve Cash Flow


Leasing. Improves Cash Flow

LED Sign Leasing provides 100% financing with no required down payment. Lease payments are a fraction of the total purchase price. No compensating balances are required and lease payments can be scheduled to coincide with income fluctuations.

Preserves Other Credit Sources:  Leasing keeps bank lines and other sources available to meet short-term requirements such as inventory buildup and increased receivables.
Helps Hedge Against Inflation:  Each dollar paid in lease payments five years from now will probably have substantially less purchasing power than today’s dollar.
Keeps Money in Motion:  By leasing, you can keep their money working for them. Consider what $100,000 can do when it is actively invested in inventory rather than languishing in fixed equipment.
Simplifies Budgeting:  Budgets can more readily accommodate monthly lease payments than large cash expenses for purchasing fixed assets.
Offer Fixed Rate Financing:  Leasing allows you to know exactly what their expenses will be over the term of the lease.
Helps the Equipment Earn Its Keep:  Employees are expected to earn their pay as they perform-why not equipment? With leasing, you pay for the equipment as it benefits your business.
Lets You Choose the Equipment:  You can specify the equipment you need, and the source-as if you were purchasing it directly. All normal manufacturer warranties are passed through to you.
Makes More Equipment Available:  Since the monthly payment is a small portion of the total cost of the equipment, leasing allows you the use of a greater amount of equipment for the given dollar allocation.
Provide Flexibility:  When structuring a lease transaction, the lease can accommodate requests by you for no money down, deferred and seasonal payments. Leasing can also be structured as step-up or step-down payments.
Offer Tax Advantages:  Depending on the structure of the lease payments, you may be able to assume tax advantages on their new equipment. Your CPA or accounting firm can provide you with details.


In addition to capital conservation, leasing provides businesses with some of the benefits outlined below. Some of the following points will apply to your business. Some will not. The point is to alert you to some of the hidden advantages of leasing.


100% financing
Fixed terms and payments
Conserves capital
Lower monthly payments
Simplify accounting
100% tax deductible
Can include soft costs


Preserve bank lines
Flexible terms Creates new credit source
Easy to upgrade and add accessories
Option to purchase at end of lease term
Improve financial ratios

No geographic limitations

Substantial down payment
Relatively short term
Possible variable rates
Extensive documentation
Loan Covenant restrictions (ex.: limit ability to borrow from anyone)
Exhausts credit lines
Non-finance able charges (software and soft costs. ex.: installation, training)
May require keeping 15%-25% of equipment cost in a deposit account and origination fees
Adds debt to the balance sheet (limits borrowing ability)
May require additional collateral (ex.: second mortgage on home)

Depletes cash reserves
Reduces investment leverage
No hedge against inflation
Limits options
Slow tax write-off
Reduces working capital

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