What is leasing?

Leasing is a method of acquiring capital equipment that helps to grow businesses and helps them to operate more efficiently. It requires a customer (Lessee) to make specific monthly payments over a mutually agreeable fixed period of time (typically two to five years). The title for the equipment remains with the Lessor for the term of the lease. At the end of the term a purchase option provision may be exercised by the Lessee, and at that time, the title to the equipment is passed to them.

Leasing has become wildly accepted method for financing equipment purchase. It has become so widely accepted that it is now the method used for 35% of all capital equipment sold in the United States.

The benefits of leasing for your customers include:

  • Leasing offers 100% financing at fixed rates.
  • Leasing does not require a large down payment.
  • Leasing allows for the preservation of bank lines of credit, which can be kept unencumbered for short-term borrowing.
  • Leasing offers flexible payment terms, such as seasonal payments, quarterly payments, etc.
  • Leasing does not involve banks, so the necessity for compensating balances or the pledging of collateral, other than the leased equipment itself, does not exist.
  • Leasing affords your customer flexible options at the end of the lease term. The equipment can be purchased for its fair market value or for a pre-set price, renewed for an additional period of time or returned to the leasing company with no further obligations.
  • Lease payments can be claimed as “operating expenses” so that the debt can be kept off the balance sheet.
  • Leasing is a hedge against inflation. It allows your customer to receive the benefits of your equipment today and pay for it with tomorrow’s dollars.

What are the advantages of leasing for you?

  • You are providing your customer with the Value-Added service of offering financing solution to help acquire your equipment.
  • By working with a financial “partner”, you maintain control of the customer during the application process, and are kept informed of any changes.
  • Upon delivery you are paid in full, reducing your Days Sales Outstanding
  • Creative financing alternatives can be created to help close sales. For example: 0% financing, no payments for 60 days, etc.
  • And many more benefits… contact us today to here how we can help.