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Why Lease?
Convenience
· Master leases allow customers to add new equipment without applying for credit
· Leases often allow customers to finance “soft costs” such
as maintenance, installation, freight, and up-front sales and use taxes
· Leasing is a less restrictive form of financing
· Protects bank lines of credit
It’s “One Stop Shopping”
The Four Basic Drivers:
• Cash Flow
– 100% financing
– FMV has lowest payment
– Avoid capital budget constraints
– Expand credit availability
– No down payment required
• Tax Benefits
– FMV lease payments may be expensed as operating expense
– May lower taxable income
• Accounting Benefits
– Potential “off-balance sheet” financing
– Improve financial ratios such as ROA & Debt-to Equity
– Reduce leverage
• Obsolescence
– Equipment can be returned to lessor or distributor at end of term
if obsolete or costly
– The value of the equipment is in its use – not its ownership
For additional information call us at: 925-454-1640
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