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Lease Financing Vs. Bank Financing
Leasing is a faster, more simplified process than bank financing.
Leasing offers 100% financing which can include soft costs such as, installation, training, shipping, etc.
Leasing offers fixed terms and payments. Bank loans are relatively short-term with possible variable rates. Lease payments are easily budgeted expenses.
Leasing conserves your working capital so it can be used more profitably for your short-term business needs rather than in assets that depreciate.
Lease payments may be 100% tax deductible. Leasing allows you to pay for the use of the equipment with pre-tax dollars, instead of drawing on past profits or working capital.
Leasing provides a low cash requirement; usually one or two payments are required. Banks often require a 10%-25% down payment on equipment loans.
Leasing provides more flexibility. Through leasing extended terms, payment amounts can be substantially lower than they would be with if the equipment were purchased with borrowed funds. Payments can be tailored to fit your cash flow patterns; with monthly, quarterly, annually, or seasonal and step payments.
Leasing does not require any "liens" on your bank accounts. Banks often place a "blanket lien" on your bank accounts as security towards your loan repayment.
Leasing preserves your credit lines; structured properly the lease debt does not have to be shown as a direct liability on your financial statements which allows you to preserve your borrowing availability with your bank and other creditors.
Leasing does not require compensating balances. Banks often require you to maintain a commercial business account, including checking and savings accounts with minimum balance requirements.
Leasing protects against operating obsolete equipment. Leasing allows you to regularly upgrade your equipment to new "state of the art" level equipment. This eliminates the inefficiencies of owning outdated equipment.
ML
Financial Services, Inc.
301 Crawford Blvd. Suite 100, Boca Raton, FL 33432
Ph: (561) 367-7749 Fax: (561) 367-9855 Toll Free: 1-888-296-3322