The Benefits of Equipment Finance

Benefits of Equipment Finance

Why do businesses ranging from mom-and-pop operations to Fortune 100 companies finance their equipment? It’s because of access to a wide range of benefits. With equipment financing, you can:

Get 100% financing with no down payment Unlike requirements of most traditional lenders, you may be able to arrange 100 percent financing of equipment with no down payment. This is key if cash flow is a concern to your business.
Maintain cash Equipment financing is a source of funding that lets you hold onto your cash, or working capital, so it can be used for other areas of your business, such as expansion, improvements, marketing or R&D.
Manage risk Equipment financing can help mitigate the uncertainty of investing in a capital asset your business needs until it achieves a desired return, increases efficiency, saves costs or meets other business objectives.
Hedge against inflation Equipment financing may hedge inflation risk because instead of paying the total cost of equipment up front or with a large down payment in todays dollars, the stream of payments delays your outlay of funds. In addition, either a lease or loan can lock in the rates that exist on the date of the closing. In other words, the finance company absorbs the devaluation of your payments over time due to inflation and other financial risks.
Plan expenses for cash flow and business cycle fluctuations Financing equipment helps maintain cash flow and greater certainty in budgeting by setting customized rent payments to match cash flow and even seasonal cash flows.
Keep up to date with new technology Leasing, loans or other financing often enables you to acquire more and better equipment than you could have without financing. Certain leasing finance programs can also allow for technology upgrades and/or replacements within the term of the lease contract.
Address tax considerations Tax-oriented leases should produce lower rents since the lessor retains title and depreciation. A tax-oriented lease is a transaction that includes the value of tax benefits. Conversely a conditional sale or loan enhances tax benefits of higher deductions to the lessee/borrower.
Leverage equipment expertise The equipment financier can bea valued consultant, providing benefits that range from setting residual rates through lifecycle asset management solutions.
Avoid getting stuck with out-of-date equipment When a lessor owns the equipment in a true lease, the lessor bears the risk of the equipment used by a business from becoming obsolete.
Outsource asset management Many financing companies provide asset management services that can track the status of equipment, know when to upgrade or update it, and provide services relating to installation, use, maintenance, de-installation and disposal of the equipment.
Obtain the convenience of product and service bundling Certain financial products allow customers to finance the entire cost of equipment, including installation, up-front maintenance, training and software charges, thereby packaging systems and ancillary products and services into a single, easy-to-manage solution.
Get no-hassle equipment disposal Equipment management by a third party, such as an equipment financing company, should enhance the ability of a business to focus on its core operations. In the case of computers and other technology devices, these companies may also agree to dispose of equipment. This service can prevent the lessee or borrower from incurring legal penalties for improperly disposing of such assets because disposal is often regulated by federal, state and local governments.

– See more at: http://www.equipmentfinanceadvantage.org/ef101/benefits.cfm#sthash.DCNwOy1x.dpuf

Technology Financing for your Business

Computer & Equipment Financing, an early pioneer in Technology financing has been financing for computers, software, medical & scientific equipment since 1992. 
 
For over 20 years we have been the “Go To” place for Technology
financing, it’s in our name. Our business has been built on a simple truth; earning our customer’s trust through consistent, reliable and outstanding customer service.


We understand the complexity of Technology financing and use our experience to make the process simple, quick, and cost effective.  We have found that the best solutions are the ones handcrafted by listening attentively to our customers’ needs and to structure programs that address those needs.
 
Having direct lending sources, syndications and other non-bank resources; enables us to meet a wide array of financing customers. From Fortune 500 to Small Business; we have the experience, resources and means to be your Technology Financing Partner.

How Equipment Financing Equips Your Business for Success

How Equipment Financing Equips Your Business for Success

Alternative Financing Compared to Bank Lines

Up to 85 percent of small and mid-sized businesses prefer equipment leasing and enjoy benefits that extend beyond conserving cash.

Some Secrets Your Banker May Not Tell You:

1.      Buying with your bank line will use up your credit line.  Your banker has a limited credit amount they can extend to you and in most cases; it is not their decision anymore.  It is now a corporate decision.  If you want to be sure to have cash available quickly when you need it, then do not tie up credit lines.

2.     Your local banker is limited on programs they can offer you.  That is why it is advised that you plan ahead and establish independent, non-bank alternative financing sources, such as Computer & Equipment Financing for your equipment & software financing needs.

      3.      Compensating balances makes your banker’s day and increase interest cost.  Many businesses are lured by seemingly unbeatable rates to bank lines, but if includes a minimum or compensating balances; then it may not be as good as it seems.  In some cases it will double the introductory rate.

       4.      Banks will often FLOAT their rates. With bank rates at the lowest on record, they only have one place to go, UP.  Lease financing rates are guaranteed fixed for the term of the agreement.

       5.      Most banks require that credit lines be brought to a zero balance once  every 12 months.  Also, they reserve the option to “call the line” (pay-off the note) should your industry or the economy start to have a downward trend.  Your note can also be called if your own business prospects start to go south for any reason.

      6.      Banks like “BLANKET LIEN” on all of your assets.  Your banker is now your partner, because you have to get their permission on any future borrowing.  We simply file a UCC on just the leased asset only. Nothing else is encumbered. None of your financial assets or flexibility will be compromised.

       7.      Fees are what we live on.  Bank fees, closing costs and “penalties” typically run 1%-4% of the transaction amount and many of these fees re-occur annually.  These fees can have a significant effect on the real interest rate you are paying.  We simply have a one-time documentation fee of $250.00 or less and no fee for repeat customers.

 

What are the benefits of leasing equipment vs buying?

The next time your business needs new computers, networking equipment or other technology, should you buy it or lease it? If you don’t know, read on. This month we’ll take a look at the benefits–and downsides–of both leasing and buying technology equipment, plus the questions you should ask to ensure you get the best deal. Leasing: The Benefits • Leasing keeps your equipment up-to-date. Computers and other tech equipment eventually become obsolete. With a lease, you pass the financial burden of obsolescence to the equipment leasing company. For example, let’s say you have a two-year lease on a copy machine. After that lease expires, you’re free to lease whatever equipment is newer, faster and cheaper. (This is also a reason some people prefer to lease their cars.) In fact, 65 percent of respondents to a 2005 Equipment Leasing Association survey said the ability to have the latest equipment was leasing’s number-one perceived benefit. • You’ll have predictable monthly expenses. With a lease, you have a pre-determined monthly line item, which can help you budget more effectively. Thirty-five percent of respondents to the Equipment Leasing Association’s survey said this was leasing’s second-highest benefit. • You pay nothing up front. Many small businesses struggle with cash flow and must keep their coffers as full as possible. Because leases rarely require a down payment, you can acquire new equipment without tapping much-needed funds. • You’re able to more easily keep up with your competitors. Leasing can enable your small business to acquire sophisticated technology, such as a voice over internet protocol (VoIP) phone system, that might be otherwise unaffordable. The result: You’re better able to keep up with your larger competitors without draining your financial resources. Leasing: The Downsides • You’ll pay more in the long run. Ultimately, leasing is almost always more expensive than purchasing. For example, a $4,000 computer would cost a total of $5,760 if leased for three years at $160 per month but only $4,000 (plus sales tax) if purchased outright. • You’re obligated to keep paying even if you stop using the equipment. Depending on the lease terms, you may have to make payments for the entire lease period, even if you no longer need the equipment, which can happen if your business changes. Buying: The Benefits • It’s easier than leasing. Buying equipment is easy–you decide what you need, then go out and buy it. Taking out a lease, however, involves at least some paperwork, as leasing companies often ask for detailed, updated financial information. They may also ask how and where the leased equipment will be used. Also, lease terms can be complicated to negotiate. And if you don’t negotiate properly, you could end up paying more than you should or receiving unfavorable terms. • You call the shots regarding maintenance. Equipment leases often require you to maintain equipment according to the leasing company’s specifications, and that can get expensive. When you buy the equipment outright, you determine the maintenance schedule yourself. • Your equipment is deductible. Section 179 of the IRS code lets you deduct the full cost of newly purchased assets, such as computer equipment, in the first year. With most leases favored by small businesses–called operating leases–you can only deduct the monthly payment. Buying: The Downsides • The initial outlay for needed equipment may be too much. Your business may have to tie up lines of credit or cough up a hefty sum to acquire the equipment it needs. Those lines of credit and funds could be used elsewhere for marketing, advertising or other functions that can help grow your business. • Eventually, you’re stuck with outdated equipment. As I mentioned earlier, computer technology becomes outdated quickly. A growing small business may need to refresh its technology in some areas every 18 months. That means you’re eventually stuck with outdated equipment that you must donate, sell or recycle. – See more at: http://treasurecoastfinancing.com/blog-2/#sthash.Qad8QD66.dpuf