The Advantages of Leasing

• Convenience-combine equipment, maintenance and training costs into one payment plan
• 100% Financing-and terms beyond traditional loan terms
• Tax Benefits-write off 100% of lease cost as operating expense (vs. only interest with a conventional loan)
• Credit Line Conservation-avoid borrowing and keep valuable lines of credit open
• Improved Balance Sheet-equipment leasing is not borrowing, so liabilities are not increased, asset-to-liability and debt-to-equity ratios are not impaired
• Fast Acquisitions-get the equipment you need without waiting for loan approval
• Staying on the Cutting Edge-leasing allows you to stay current with the latest technology
• Little or No Down Payment-with a typical lease, only one or two payments are required up front…sometimes none at all

Types of Leases

• True Lease-lower lease payments when the Lessor retains the tax advantages; purchase price at maturity is usually fair market value
• $1 Purchase Option-own the leased equipment at the end of the lease for a nominal amount ($1)
• 10% Purchase Option-own the leased equipment at the end of the lease with a lower payment than in the $1 Purchase option
• TRAC Lease (Terminal Rental Adjustment Clause)-value of collateral is stated in lease; limited to titled vehicles used in the business; at the end of the lease, equipment is sold and Lessee receives any value above the TRAC or makes up any shortfall
• Tax-Exempt Leases-For 501(c) non-profit organizations; 100% financing available
• Municipal Leases-governmental entities acquire equipment without costly and lengthy bond issues; Lessee owns equipment at end of lease for a bargain purchase option

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