- What is equipment leasing?
- Why would any business entity be interested in leasing?
- How can it be the cost effective way to acquire equipment?
- I have always heard that leasing rates are not competitive with conventional financing.
- What is the procedure and how long does it take?
- How is a lease structured?
- What equipment can be leased?
An equipment lease is a contract that transfers the right to use equipment to the Lessee (Lease Customer) in return for monthly payments to the Lessor (Leasing Company). Ownership is retained by the Lessor until the Lessee exercises the purchase option.
Why would any business entity be interested in leasing?
It is the cost effective way to acquire the use of equipment!
How can it be the cost effective way to acquire equipment?
A.) A much lower initial cash outlay is required, usually only the first, or first and last month's payment. This translates to no liquidation nor borrowing. If you do have cash, it allows you to invest the money elsewhere. The new equipment allows increased efficiencies and the equipment generates the cash flow to make the rental payments.
B.) If the lease is properly structured, there are no disturbances to the business entity's current debt ratio.
C.) Certain types of leases will allow your business the opportunity to lower your taxible income. The tax lease (as recognized by the IRS) allows the lessee to deduct the total annual rental expenses as operation expenses--directly reducing your taxable income.
D.) A tax lease allows your business to gain protection against obsolescence and inflation by allowing your firm to set your own planned expense schedule rather than a fixed depreciation schedule.
I have always heard that leasing rates are not competitive with conventional financing.
Not always true, leasing rates can be less than or close to the prime rate. Remember that the lessor can get the depreciation from the equipment if the lease is properly structured. This allows the lessor to factor the depreciation into their yield allowing this lease to be a win-win situation for both the lessee and the lessor.
What is the procedure and how long does it take?
The entire procedure is very simple and quick. Once you have determined what you want and know the price, contact Nolan Leasing. We will provide budgetary figures and have you complete a simple lease application. Upon your acceptance and ours, we will prepare lease documents. The supplier is paid after executions of the lease and your satisfaction with the delivery of the equipment.
A lease is flexible and can be tailored to your needs. Lease terms can range from one to eight years. Payment schedules can be graduated or timed to suit even the most unusual request. The most common method of payment is equal monthly payments. Ownership of the equipment is passed to the lessee when the lessee exercises their purchase option.
We lease almost any piece or package of equipment, for example: construction equipment, industrial & plant equipment, business machines, office furniture, computers (including software), medical equipment, paving equipment, irrigation equipment, storage sheds, trucks, trailers, sanitation equipment, environmental protection equipment, printing equipment, and more...
