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Equipment & Vehicle Leasing
What is "Leasing"?
Leasing is simply the "hire" of equipment,
vehicles; plant; for a specific period of time, by a company or business.
The benefits to the "hirer" are
| 1) |
"tax advantages"; (tax deductible
if used for business - equipment that might be considered too
costly to purchase can be "hired"); |
| 2) |
Improved "sales" at "point of Sale" |
| 3) |
low initial deposit and minimum
monthly payment. |
| 4) |
Various "tickets" - (sizes of lease) |
| 5) |
Can create an "open-line" of credit
with bank or lender, if account is conducted properly. |
| 6) |
Long-term financing; |
| 7) |
Preserves capital and/or credit lines |
| 8) |
Fixed expense |
| 9) |
Trade-in possible, or purchase at
the end o the lease |
| 10) |
Helps offset inflation |
Should I buy or should I lease?
It is generally agreed that the most common failure for Business
failure is insufficient capital and the improper management of cash
flow. Therefore purchase of an item rather than leasing may well
have a detrimental effect on the success of a business. Leasing
can be a very effective tool, and enhance the chance of success
for any business.
Lease - Payments are only an item in your monthly operating
cost. Minimum accounting allows more freedom to concentrate on running
your business. In most cases the client can choose the terms, purchase
option, and down payment of your lease. Terms are usually 36, 48
& 60 months. We can usually locate a lender for most equipment types.
Provided the lease is structured properly, you may deduct the entire
rental payment as a current operating cost.
Loans - Banks are less flexible when compared to leasing
companies. Not good therefore where flexibility is required by a
business. Banks usually only provide a portion of the equipment
cost (80%-90%) and this does not include "incidentals" i.e. taxes,
shipping, installation. Banks also secure their loan with other
collateral i.e. real estate, equipment presently owned.
What can be leased? - At "Pathfinder Commercial Finance"
we have a large selection of companies, each of whom specialises
in various types of equipment, vehicle etc. leasing. We therefore
can find a "lessor" who will provide the finance subject to their
criteria being met by the applicant. In short almost any equipment
necessary to the running of a business, including I.T. hardware
and software.
Summary - There are many things to consider and advice should
be sought from an accountant and/or solicitor. Biggest factor is
economic and whilst this varies greatly from customer to customer,
the common over-riding factor is the freeing of working capital,
thus preserving cash to fund the day to day running of the business,
rather than using it to purchase equipment and fully fund depreciating
assets such as vehicles. This is smart business sense. Again we
would stress that the combination of lack of equipment and inadequate
working capital can severely limit the true potential pf most companies
and businesses.
What ever your requirements please contact "Pathfinder" for an initial
discussion.
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