Business Equipment Leasing

Business Equipment Leasing

Equipment used to operate a business can be very capital intensive which is why businesses should consider leasing it as opposed to purchasing it on their own. We offer leasing options that can eliminate the need to tie up working capital in a depreciating asset. We offer several different lease options that fall within two main categories.

Fair Market Value Lease

Also known as a true lease, it is similar to an automobile lease in that the user never takes title of the property. Rather, payments are made over the term of the lease which has a set expiration date. At the end of the lease term, the lease can be renewed or the property is returned to the vendor. The lessee can also choose to purchase the equipment at its fair market value. FMV leases are favored by businesses that want to expend the least amount of cash flow, and that want the flexibility to upgrade their equipment very few years to take protect against equipment obsolescence. Payments on an FMV lease are generally tax deductible.

Finance Lease

Businesses that prefer taking ownership of the equipment would benefit from a finance lease that combines interest expenses with principle payments. Because it ends up as a purchase, the payments are generally higher and they are not tax deductible *(however, depreciation allowances may be available). The purchase price is set in the terms of the lease which may be a specific dollar amount (for as low as $1) or a percentage of the original purchase price. The lessee doesn't take ownership until the all of the terms of the lease have been fulfilled.

Why Equipment Leasing may be a Good Option

  • Keeps more working capital in the business
  • Most lease situations generate tax benefits, either in the form of tax deductions or depreciation allowance.
  • Payment terms can be structured around seasonal cash flow changes
  • Some leases allow for deferred payments until revenue is generated from the equipment
  • Equipment will always be technologically current
  • Repairs and maintenance are usually included in the lease terms

If your business needs new equipment or an upgrade, an equipment lease may be the quickest and most cost effective way to get access to the best equipment available. Our equipment leasing specialists can help you determine the best leasing option for your business.

*The tax implications of leasing vary depending on the type of lease and should be fully reviewed with a tax professional prior to signing a contract.