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BENEFITS
OF LEASING
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Leasing
is Flexible and the
lease may be structured to meet the needs of the customer by providing
tax advantages, optimizing cash flow, variable payments, and flexible end
of lease options.
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Leasing
Conserves Working Capital and
unlike bank loans does not require significat down payments.
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Leasing
Increases Your Credit Resources as
bank credit lines are not utilized.
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Leasing
May Improve The Balance Sheet as you
may be able to deduct lease payments as an operating expense, rather than
having to capitalize the equipment if it was purchased.
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Leasing
Helps Avoid Obsolescence by providing
for easy upgrades and additional equipment simply by adding new lease schedules
to the master lease. At the end of the lease, return the equipment, negotiate
an extension, or purchase. |
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TYPES OF
LEASES
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Finance
Lease: Actually
a conditional sale. Title transfer to lessee at end of lease for $1.00
or for a fixed percentage of equipment cost.
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Operating
Lease: Allows
lessee to expense lease payments providing substantial tax benefits. The
lease discounts to 89% or less of equipment cost. The title transfers only
if lessee purchases equipment for fair market value at the end of the lease.
In order for a lessee to qualify for an operating lease, the lessee must
have excellent credit, and the equipment must have a strong residual projection.
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Sale
/Leaseback: Provides
for the purchase and leaseback of customer owned equipment with a finance
lease structure.
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