Financing Leasing
Financing
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Leasing
Mr. Rockefeller may not have been noted for his environmentalism - but he certainly knew how to build a profitable business. Remember, income is not generated from the ownership of equipment. It is generated by the use of it. By leasing capital equipment you can conserve cash and invest it in other income generating ways.
Manage Your Cash:
• Preserve capital - keep your money in the bank for operating expenses
• Low monthly payments - compared to a traditional bank loan, equipment leasing typically offers lower monthly payments by adjusting the term of the lease
• Fixed payment - with equipment leasing, the term and payment are fixed in the lease contract. There are no surprises in your monthly cash outlay
• Soft costs included - installation charges, sales tax, and other fees which in total can be quite significant, do not need to be paid for with cash. These costs can instead be included in the lease financing.
Speed:
With a simple one page application you can initiate the process for an equipment lease. If the amount of the equipment is less than $75,000 usually no additional information is necessary for approval. Typically, this type of transaction can be completed in a few hours. Banks, on the other hand, require stacks of paper for even the smallest amounts.
Tax Benefits:
Equipment lease payments are often fully deductible. You should always consult your tax advisor to confirm the tax treatment for a lease. Generally, payments made through a true fair market value lease are fully deductible. A $1 or fixed 10% Â purchase option lease allows for the deduction of the interest portion of the payment and depreciation of the principal portion.
Flexibility:
With equipment lease finance you can pick a payment and term that you are comfortable with. Choose from 12 to 60 months; Â for $1,000,000 and up terms of up to 15 years are possible for large-scale wind financing and solar energy financing. Your GREENTECH account manager will help you select the payment and term that satisfies your needs.
Avoid Technology Obsolescence:
If you choose a fair market value lease or a lease with a residual, the leasing company assumes some of the risk of the value of the equipment at the end of the lease term. For example, if you believe energy technology will change in a few years and you will need to upgrade your equipment, you can choose a 24 or 36 month term. At the end of the equipment lease you can return the equipment, extend or renew the lease, or purchase the equipment. Keep in mind that purchasing equipment with traditional bank loans or cash offers no flexibility. You own the equipment regardless.