The Leasing GroupThe Leasing Group

Archive : August 2013

By The Leasing Group

Four differences between vendor leasing and local bank leasing

When you set out to lease equipment for your business, there are a variety of financing options available. One option is to get financing through the company that manufactures or sells the equipment itself. This kind of lease can be attractive because, on the surface, it seems fast and easy. Sometimes it is both. But it is smart to explore local financing, as well.

Here’s why:

1. Understandably, manufacturers and vendors normally only lease what they sell. When you choose lease financing through a local financial institution, you can bundle equipment from multiple vendors into one lease. The Leasing Group can help you negotiate this type of lease contract. Bundling has many advantages; you can read about them here. (LINK)

2. When you lease through a vendor, the interests of the manufacturer are often put ahead of the customer’s. At The Leasing Group, your welfare is our No. 1 priority. For example, in a manufacturer or vendor lease, you may be required to issue payment before your equipment is delivered. When you work with The Leasing Group, we’ll make sure you don’t fork over a penny until you have your equipment in hand.

3. Your vendor’s processing and service centers may not give you the best service. Most likely, their service operations are mass call centers located out of state, so even getting a human being on the phone to assist you can be a challenge. Local financing means local, personalized, more responsive service.

4. Getting out of a lease early or at the end can be a hassle. Receiving your title or final bill of sale can take weeks, even months, because the vendor is in no hurry to give it to you. A lien on the equipment can hold up the process and cause further problems. You might also run into penalties or fees if you try to terminate the lease ahead of schedule. With local financing, you rarely encounter these types of roadblocks.

Some manufacturers and vendors do a good job with their lease processing; but, many don’t and you often don’t realize it until it’s too late. When you partner with The Leasing Group, you can rest assured that we work for you, not the maker or seller of the product you’re leasing. Trust us to provide the best lease contract terms with the lowest rate and with the least hassle.

Call us at (502) 547-2773 to learn more about local financing for your equipment lease.

By The Leasing Group

Case Study: Financing in a Hurry

Companies often need financing in a hurry. Sometimes, this leads them to make rash decisions that don’t serve their best interests, and they create unnecessary headaches in the process.

Recently, a commercial distributor approached us with a problem related to leasing a piece of packaging and distribution equipment valued at $350,000. Because they were in a hurry, they had already agreed to enter into an equipment lease with the equipment manufacturer.

The distributor got what appeared to be a quick approval, but they noticed that the terms of the lease changed by the time they received the contract. For starters, the lease payments were higher than what was originally agreed to. In addition, the sales tax was assessed twice, both at the time of the sale and on the lease payments. Complications ensued when the manufacturer’s lease included ambiguous and onerous language that ultimately killed the deal.

Throughout the process, impersonal, ineffective service received from a lease-processing center on the West Coast was a huge roadblock to finalizing the deal.

When the distributor finally threw up their hands and approached The Leasing Group, we secured standard lease financing in just one day. We closed the lease two days later.

Our client was extremely grateful that we were able to take what had been a four-week long quagmire of snag after snag and transform it into three days of success.

If you’d like to learn how we can help you navigate your own complicated leasing waters, call us at (502) 547-2773.

By The Leasing Group

Lower your tax bite by acquiring equipment: Here’s how

Is your computer equipment on the verge of extinction? Or is your fleet of delivery vehicles starting to show some dents and rust? If you know you’ll need to invest in new business equipment in the next few months or so, do it now to take advantage of the 2013 IRS Section 179 deduction.

Section 179 was designed with small to medium businesses in mind. Almost all types of business equipment qualify for the Section 179 deduction. It applies to both cash purchases and equipment lease financing, and either option can be a lucrative way to lower your tax burden for 2013.

Section 179 is part of the American Taxpayer Relief Act of 2012. It allows businesses to write off up to $500,000 of qualified capital expenditures on equipment valued up to $2 million in the 2013 tax year. It also includes an option allowing businesses that exceed the $2 million cap to write off 50 percent of qualified assets using a first-year bonus depreciation.

Simply put, the Section 179 deduction helps to decrease taxable income. For example, if a company shows income of $100,000 but leases or purchases $50,000 in computer equipment, the business can take a 100 percent deduction on the entire equipment cost. The result: the business shows a $50,000 deduction, which lowers its taxes.

The advantage of financing your equipment through a lease rather than purchasing it outright is primarily to conserve cash flow. You take advantage of the tax deduction during the year you enter into the lease, but you’re not out any money until the lease payments start. You can obtain 100 percent financing with a lease, without a required downpayment.

The Section 179 deduction must be voted on by lawmakers every year. If no action is taken by Congress before the end of 2013, the maximum deduction will be reduced to $125,000 in 2014.

Let the Leasing Group help you determine if Section 179 will work for your business. Schedule a free, 15-minute phone consultation. Does it make sense to go ahead and invest in equipment now? Is an equipment lease the best option to take advantage of this tax break?

The year is more than half over, so call us at(502) 547-2773 today.