Financing Calculations
Why Do Companies Finance Equipment?
There are many reasons why companies finance equipment. Equipment financing/leasing provides flexibility and protection against technological obsolescence. Financing allows a company to better match cash outflow with revenue production through the use of the equipment. Finally, financing conserves valuable working capital and bank lines.
Business equipment financing is efficient, convenient, and allows for 100% financing of equipment value.
Balance Sheet Management - Certain types of financing/leases help the buyer better manage the balance sheet and improve their overall financial picture, by conserving operating capital and freeing up working capital and bank credit lines for inventory, expansion and emergencies. See Operating vs Capital Lease
100 Percent Financing - With equipment financing, there is no down payment. The term can be matched with the useful life of the equipment.
Asset Management - Financing provides the use of equipment for specific periods of time at fixed payments. It assumes and manages the risks of equipment ownership. At the end of the term, the buyer keeps the equipment.
Service Additions - Many financing structures can include installation, maintenance and other services, if needed.
Tax Treatment
- Leasing offers the option of deducting 100 percent of the lease payment as a business expense. See Operating vs Capital Lease
- Financing can allow full equipment depreciation over a very short time often within the same year of purchase.
- Consult your tax advisor for details pertinent to your specific situation
Upgraded Technology - Financing provides companies with the ability to keep pace with technology. A lease can upgrade or add equipment to meet ever-changing needs.
Flexibility - There are a variety of financing/leasing products available, allowing the buyer to customize a program to address needs and requirements - cash flow, budget, transaction structure, cyclical fluctuations, etc.
Proven Equipment-Financing Option - Over 30 percent of all capital equipment in the United States is acquired through financing/leasing. In fact, eight out of 10 companies finance their equpment.
To start the approval process please provide the following information:
Option#1: Application Only,please provide the following information:
Complete Credit Application & signed proposal(Download from below)
Copy of the quote
First page of the last 3 months of the company's bank statement(used to determine the average bank balance)
Option#2: Full Disclosure, please submit the above information plus:
Last 2 years corporate financial statement & tax returns(if not reviewed or audited)
Interim and prior year comparative financial statement
Last 2 years of tax returns & a personal information statement from the shareholders(no older than 90 days)
Lease Calculator
