Advantages of Leasing your Equipment

Frees working capital for more productive uses since leasing provides up to 100% financing.

Provides Tax Savings.

100% of the soft costs can be wrapped into the lease(can include tax, freight, installation, warranty, and training costs).

Leasing is an off balance sheet item and will not show as a liability. This will allow credit lines to remain intact.

Provides a hedge against inflation by paying over time (equipment is paid for in cheaper dollars).

Is more flexible in meeting your needs than conventional financing (longer terms, flex pays, etc.).

Provides a new credit source. By making timely lease payments a positive trade line is created, which will allow for easier acquisitions in the future.

Provides fixed rate financing.

Hedges against obsolescence.

Makes for easy equipment upgrades.

Disadvantages of Traditional Bank Financing

Most banks will require a minimum of 20% down in addition to soft costs, which eliminates the 100% funding option. You are also responsible for paying tax, which can play a large role in larger ticket items.

Commerical loans are a balance sheet item showing as a long-term liability.

Banks will have attachments on their agreements using collateral such as real estate or vehicles to secure the loan. The banks will also blanket lien homes, businesses and equipment.

Bank lending is usually reserved for long time customers and higher net worth individuals, reducing the chance for the small to mid-size business owners to be approved.

Banks usually lend smaller amounts than leasing companies and under tighter lending restrictions.

Start-up businesses are virtually impossible to approve for a loan.

No relevant tax savings, depreciation can be deducted.

Flexible payment options do not exist with bank financing.