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Financing
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Convenience, Ease, No Deposits, Less Risk, Lower Down Payments, and Tax Advantages.
All Reasons to finance!
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Financing & Leasing
Top 10: Why Leasing Is Better Than Bank Loans
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1. In order to get approval for a bank loan, the applicant must submit three
years corporate and personal returns showing a profit on the corporate returns.
Leasing only requires the applicant to fill out an application. We can approve
the applicant for up to 75K. This is quite different from bank loans. It is a
fact that up to 90% of small businesses would not qualify for bank loans
because they fail to show profits.
2. The only collateral pledged is the leased equipment. Consequently, the
payment will be higher than any bank payment because the collateral given is
only equipment. A major asset (personal residence, building, car, business,
etc.) is not pledged as collateral, just the equipment.
3. The new equipment that you are acquiring will generate income. The profits
generated from the productivity of the new equipment are usually greater than
the lease payments. Therefore, this will improve your cash flow.
4. Leasing allows for the conservation of capital which may be retained and
utilized elsewhere to increase profits (purchasing retail). Leasing is a
predictable budgetary tool since payments are fixed and not subject to the
fluctuations of the Prime Rate as in the case with bank loans. NOTE: All bank
loans fluctuate monthly - your payment is never the same.
5. Leasing allows for the preservation of bank lines of credit which can be
completely unencumbered for short-term borrowing. Since leasing does not
involve your bank lines, there is not necessity for compensating
balances/relationships or pledging of collateral other than the leased
equipment.
6. Leasing does not require a large down payment which is normally the case
with bank loans. NOTE: Bank loans can require up to 40% down payment.
7. Leasing is a hedge against inflation. It allows you to receive the benefit
of your equipment today and pay for it with tomorrow's dollars.
8. Leasing affords you more flexible options at the end of the lease. The
equipment can be purchased at a pre-set price, fair market value, or returned.
9. There are no pre-payment penalties.
10. In the event of default, our lease agreement indicates that we will
repossess the leased equipment and resell it for its fair market value. This is
very different from a bank loan because if you default on you loan the bank
would have no interest in the equipment or reselling the equipment on your
behalf. However, the entire outstanding balance will be due and the asset
pledged (your home) could be seized.
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100% Financing
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Conserves Capital
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Can Lessen tax liability
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Conserves bank lines
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Flexible Terms
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Hedge against inflation
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Obsolescence protection
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Fixed terms & payments
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Full use without ownership
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Creates new credit source
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Easy Add-on/trade up
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Builds customer relationships
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Agreement that is non-cancelable (However, lease may be assigned over to new
owner & equipment upgrades may be done.)
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Direct ownership
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Depreciation
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Appropriate when bank lines
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remains un-lapped or there is
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a loan covenant requirement
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Capitalizes equipment
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Relatively short term
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Extensive documentation
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Covenant restrictions
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Exhausts credit lines
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Non-financeable charges
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No obsolescence protection
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May require: Compensating balances, down payment and organization fee
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No finance charges
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Direct Ownership
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Depreciation
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Attacks cash reserve
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Reduces investment leverage
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No hedge against inflation
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No Obsolescence protection
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