LEASING vs LOANS
– Rates are usually floating and based on Prime Rate.
Lease – Payments are generally fixed for
the life of the
- Banks generally lend a portion (60%-80%) of the equipment cost;
soft costs such as shipping, training, installation, etc.
Lease - Able to finance the complete
soft costs and sales tax.
- Banks use fees to boost their rates of return on loans, including
fees, origination fees, commitment fees, schedule fees, funding fees
charges for expenses.
Lease - In 99% of small-ticket equipment
leases (up to
$150,000) there are no origination, commitment or application fees.
- Banks tend to be somewhat less flexible.
Lease - In most cases you choose the
terms, purchase option.
- Banks won't finance equipment they don't understand or feel has
Lease - Our funding capabilities ensures
we will finance
virtually any equipment that generates income for your business.
- Full financial package.
Lease - One page application.
- Banks are historically slow in making credit decisions.
Lease - Approval within days.
- Banks usually secure their loans by requiring additional collateral
real estate, equipment, inventory, or receivables.
Lease - In most instances, the only
collateral is the
equipment being leased.
Bank loans often require that the borrower maintain certain minimum
ratios and report them to the bank on a quarterly basis.
Lease - There are no restrictive
10. DOWN PAYMENT
- A loan requires the end user to invest a down payment in the
Lease - A lease requires no down payment
and finances only
the value of the equipment
11. TAX ADVANTAGES
- End users may claim a tax deduction for a portion of the loan payment
interest and for depreciation which is tied to IRS.
Lease - When leases are structured as
true leases, the end
user may claim the entire lease payment as a tax deduction.
12. COMMON SENSE FACTOR
– (Rent to own) always lease equipment that depreciates in value”