Small Business Leasing Equipment Leasing and Financing Leasing is the smart way to acquire equipment, computers, and software for your business. A Gallup survey shows that 60% of U.S. businesses lease a portion of their equipment. Briefly, here's why: Low monthly payments The monthly lease payment will usually be lower than the payment required by other methods of financing. No need to tie up capital Keep your business’ cash for future needs, unexpected expenses or working capital when revenues are low. You can always lease equipment – you can’t lease money! Most types of financing require down payments of up to 25%, whereas leasing covers 100% of the cost of the equipment. Most leases require only one or two payments in advance. Get immediate use of the equipment with minimal up-front cost. Preserve existing lines of credit Leasing has no impact on your bank credit lines. Protect your borrowing power for other business needs or opportunities. Eliminate obsolescence Technology is changing at a rapid fire pace. What meets your business’ needs today may be obsolete three years from now. Leasing allows you the flexibility to maintain a competitive edge by giving you today’s best technology then allowing you to upgrade when the equipment has outlived its advantage. Fixed payments through the term of the lease Unlike bank lines of credit that usually have variable rates, lease payments are fixed no matter what happens in the market. By choosing leasing you won’t be a victim of skyrocketing interest rates. Remember the 80’s when rates rose from 9% to over 20% in one year? That can’t happen with leasing.   Significant tax and accounting advantages Leasing eliminates the need for complicated depreciation schedules since lease payments are generally line item expenses on your P&L statement. And since lease payments can usually be treated as a pre-tax business expense you may even reduce your taxes. Paying cash for equipment automatically adds 30-40% to the cost when you realize that cash = profits and taxes are paid on profits. Leasing is the right choice! It minimizes demands on cash flow, eliminates obsolescence, keeps your bank lines open, saves on taxes and shelters you from the market Since your bank lines are untouched, and there's no down payment, leasing frees working capital so you can run your business more productively. You can usually qualify for a lease, up to 150K, faster than you can fill out the forms for a bank loan. At the end of the lease contract, you have various options: return the equipment with no further obligation purchase it outright purchase options: $1, fair market value, 10% extend the lease You're a good candidate for leasing if your established business has a track record of good credit, stable cash flow, favorable bank and trade references, and two or more years in business under the same ownership. Sale & Lease Back Many companies need working capital for expansion and do not want to use their bank lines for working capital. Many leasing companies have a program where they can use the equity in your existing equipment to give your company the working capital it needs. They buy your equipment and lease it back to you and when all the payments are made you own the equipment again. Startup Program Most financial institutions will not finance companies that are just going into business. If your company has just started in business, or is in business for a short time usually less than two years, leasing companies can help you grow by financing the equipment you need to be successful.