Equipment Financing

Are you looking to purchase a piece of yellow iron equipment or business equipment?

Obtaining business financing in the current economic climate can be a challenge because most lending institutions have strict lending requirements and only lend to companies that can show a sustained profitability and verified financial records.

So, where does this leave you? When you tried to get that loan, you were turned down. The traditional forms of financing aren’t available for you. Ninety percent of small businesses can’t get a loan from a bank.

There is a solution that is available to you. Equipment Leasing, it’s a form of financing that is used by corporations to acquire equipment. What’s the difference between a lease and a loan?
When a company executes a lease the title to the equipment remains with funding source. This means that you are renting the equipment and when you finish making the payments you will own the equipment at a pre-determined purchased option. Most of the leases you will see will either be a $1.00 purchase option (buck out) or a fair market value option (FMV) not to exceed 10% of original equipment cost. When a company executes a loan, the title to the equipment remains with the company and the equipment is used as additional collateral for the loan.

WHEN YOU LEASE: There is usually NO down payment (its up to you), NO Blanket Liens, NO Financial Covenants, end user does not bear the risk of obsolete equipment, PAYMENTS ARE TAX DEDUCTIBLE, off balance sheet transaction and it does not affect your available credit

WHEN YOU OBTAIN A LOAN: There is a down payment required, a Blanket Lien is required, Financial Covenant is required, you bear all the risk of obsolete equipment, only partial tax deduction, shows on your balance sheet and it does affect your available credit.

Generally your money should earn you 30% annually. Let’s take a look at how much money your company is losing by making a $50,000 equipment purchase as opposed to leasing.

EXAMPLE:

$50,000 (company money) X 30% = $15,000 income

Now calculate that 30% annual income of $15,000 over a 5 year period = $75,000

So, now you can see if you spent $50,000 on equipment, you would be out of pocket $50,000 and the 30% annual income over a 5 year term which is $75,000, you would be out of pocket a total of $125,000.

If you leased the equipment you would only have to put up one or two payments. These payments are a tax write off, so, which route would you follow?

Would you like to expand your business? Do you need an extra piece of equipment so you can start that new project that you were just awarded? If you could get that new piece of equipment, could you improve your business?

Financing can be arranged for customers that have had bankruptcies, tax liens, slow pays, judgments and repossessions. Assets qualify you, not credit scores.

KEEP IN MIND—each time you submit a deal to a leasing company and they pull your credit, your credit risk score is lowered. Be careful, or you may shop yourself out of any chance of obtaining your lease. Also an excessive amount of inquires will adversely effect you chances of being financed. Don’t make a lender ask themselves—Why didn’t any of these other companies finance this customer?

Our process is streamlined to facilitate lease approvals within 24 hours of receiving a completed application. Typically funding is done in five days, depending on the program that best fits your situation.