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Tag : Business Equipment Lease

By Bob Callander

Borrowers…What are You Looking For?

Borrowers…What are You Looking For?

(Seven Questions)


So, your company is acquiring new equipment and you’re ready to search for a lender, loan broker, leasing company or maybe even a supplier financing option.  In today’s economy, the choices are many and growing fast.  With such a vast array of financing providers how does a business sort them out?  Maybe it’s simply a matter of deciding the best fit.

There are certainly any number of traditional big banks in your market, in addition to numerous loan shops, smaller community banks, equipment leasing specialists, internet lenders and captive financing companies.  Only you can decide which is best for your needs.

To help you sort them out, start by making these comparisons:

  1. Do I need a traditional big bank with unlimited capacity or would a smaller community bank or perhaps non-traditional lender provide enough capacity?
  2. Do I prefer an on-line application or a face-to-face experience?
  3. Is an existing relationship best or someone new?
  4. Should I seek a provider with the lowest rate along with possible side fees and charges, or a provider offering a fair rate with no surprises?
  5. Do I need a quick credit decision (less than ten minutes) or would a processed decision based on mutual respect, trust and communication be fast enough?
  6. Is this a one-shot deal or is it better to line up future financing with a trusted credit partner for many deals over many years?
  7. Am I okay with a lender who will plug my company’s financial statements into their credit scoring model or one which will look beyond the numbers and ask questions to personally understand my story?

It all ties back to finding a lender that serves your needs first.  How important is pricing?  What about trust, timeliness, longevity, integrity, experience?  How important is building a future relationship?

There is no right or wrong lender for your business.  Most are very good at what they do.  So, go find the one that best fits your needs.

By Bob Callander

Credit Scores are on the Rise

Credit Scores are on the Rise

Summarized from The Wall Street Journal


Consumer credit scores continued to climb in the U.S. this past spring due primarily to lower unemployment and steady economic growth.  This trend is further enhanced by the credit agencies and the way they report historical consumer financial problems.  Foreclosures and bankruptcies originating during the “great recession of 2008 – 2010 are just now starting to fall off individual credit reports.  More than six million U.S. adults will soon have their recession-related financial problems completely wiped out.  Higher credit scores will follow.

Average credit scores nationwide surpassed 700 in April 2017, the highest average scores since 2005.  This helps the economy since higher scores enable lenders to not only make more loans but make them at lower / less risky interest rates.  Most affected will be the purchases of “big-ticket” items as consumers buy more cars, boats, appliances, furniture, and homes.

Credit card borrowing, already on the rise, should also continue to trend further up thanks to higher card limits and more competitive / lower interest rates.

Altogether, higher credit scores are good for borrowers, lenders, and the economy in general.  Look for a flood of new loan solicitations and credit card promotions.  The economic cycle leading to easier credit for more credit worthy consumers is well underway.

By Bob Callander

Buying, Borrowing and Leasing

Buying, Borrowing and Leasing

Which is best?

#2 – Bank Loans


When considering business equipment financing, your bank is often the first and preferred “go to” solution.  You know your banker.  You trust your banker to be truthful and fair.  Your credit history is good.  You and your bank are business partners with a long and mutually beneficial relationship.

The use of bank financing is an obvious way to pay for new equipment without burning your pile of operating cash.  But is it always the right solution for your company’s future?

First consider the following questions:

  1. What is your “global” borrowing capacity?  Does your bank also finance your building, your home, personal vehicles, and your kid’s education?  How will adding one more loan affect your entire borrowing relationship?  Given other obligations, can your bank make a quick decision, or will your cumulative loan balances slow the process, requiring lengthy bank evaluation at multiple decision levels?
  2. What about loan covenants and collateral attachments?  Will your bank require all business assets to be pledged or ask you to maintain specific cash deposits?  How about cash flow coverage ratios and debt ratios?  Will these covenants restrict growth during the loan term?
  3. What about your loan’s interest rate?  It might look reasonable at first glance, but are there fees attached?  Can you payoff early without penalty?  Are there additional charges applied to late payments?  Is the interest rate fixed for the full loan term or is it adjustable or floating, tied to an index such as the Federal Reserve lending rate?

A bank loan can be a good option when financing equipment purchases, but not always the best.  Just make sure you understand the loan process, read the loan documents, and keep options open should your financial condition change during the loan period.

best business funding leasing

By The Leasing Group

#1 Best Idea for Business Expansion

#1 Best Idea:   Allow businesses an option to write-off 100% of the cost of new equipment purchases in the year of purchase.  Good idea, right?


Oops, we had that already.  It was known as IRS depreciation “Section 179” and allowed a 2013 deduction up to $500,000 plus a 50% bonus depreciation on purchases over $500,000.


What an incredible windfall! 


Unfortunately this super generous tax code provision all but expired completely on December 31st last year.  Party over!  It died without as much as a whimper.  The new limit is now only $25,000, a paltry sum by any standard and hardly worth mentioning.  Bonus depreciation is gone too.


So what’s a business to do?  Gifts from the IRS don’t come around that often.  Sometimes we appreciate them most after they’re gone.


Leasing to the rescue! 


Businesses can still deduct 100% of their leased equipment over the lease term, provided they request a “true lease.”  Yes, it’s true, even when leases are capitalized for book accounting purposes (and most are), they can still be 100% tax deductable


Who stands to benefit most?  Profitable proprietorships, partnerships, sub S companies and LLC’s, where taxable profits flow through to individual owners in high tax brackets. 


Don’t delay…this popular tax break might expire soon too! 


Leasing Questions? (502) 456-2800

Business Leasing Application Online

More Experience, More Sources, More Approvals

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.

By The Leasing Group

Get ready to take on the Bridges Project with an equipment lease

If you do business in the Louisville region, you’re aware of how significantly the Ohio River Bridges Project will affect commerce here. You’ve no doubt heard some of the negative backlash from various groups, but no one can deny that the Project is already having a positive impact on local economic development. Such a massive undertaking means job creation and business growth, plain and simple.

What you may not know is that Walsh and WVB, the lead contractors on the project, simply don’t have the capacity to get it all done on their own. They will each need to hire out much of the work to subcontractors, including excavation companies, concrete firms, pavers, structural engineers, steel fabricators… the list goes on. This could amount to pieces of the pie for hundreds of subcontractors throughout the Louisville and Southern Indiana area. Subcontractors need to be ready.

To take on a contract as large as the Bridges Project, a contractor might need to add 10 trucks to a two truck operation.  Such rapid growth will make it more difficult to obtain financing.  The Leasing Group can help.  Applying for an equipment lease is a viable option for any business that needs to grow in a hurry.  Contractors should consider getting pre-approved for lease financing… NOW!  A company poised and ready to take on a big job will be more attractive than one still needing to jump through financial hoops. 

The Leasing Group can also help a subcontractor bundle multiple leases on different types of equipment from different vendors. Rather than enter into lease financing with each individual vendor, let us put one lease in place for all your equipment needs. (LINK TO BUNDLE ARTICLE)

If you’re a contractor in the Louisville area who is looking to get in on the Bridges Project action, contact The The Leasing Group at (502) 547-2773 to find out how we can help position you above your competitors.

By The Leasing Group

Equipment Financing: Five advantages of a lease vs. a loan

Years ago, the word “lease” brought to mind something you could basically pay to borrow or “rent” for a year, or two, or five. As a consumer, you can still rent furniture, appliances, and cars for a set period of time, then turn the equipment in at the end of the lease. You never owned it. You simply used it for awhile.

Today, in the world of business equipment leasing, a lease looks very much the same as a traditional loan. You don’t turn in the backhoe or dental chair at the end of the term. You take possession of the equipment from the get-go, and it’s yours for keeps.

When it comes down to the details, however, there are some distinct advantages of lease financing over a traditional loan. Here are a few:

1. In a lease, you can obtain 100 percent financing, including sales tax, if you need it. In a traditional loan, you might be required to put 20 percent down. For a $100,000 dump truck, that would translate to $20,000. Many businesses might not have that kind of cash lying around.

2. While a loan has many of the same options that a lease does, most banks don’t take advantage of them. For example, loan documents can be written to skip payments or create a variable payment structure, but they rarely do. However, it’s very common for lease documents to include this variable payment language. If you need payment flexibility, a lease is probably the way to go.

3. Both a lease and a loan require some form of collateral or security. A lease is typically secured only by the lease equipment. However, if you have taken out a traditional loan, you could end up with a lien on not only the equipment, but against other business assets as well.

4. Late payments aren’t as big of a hassle in a lease. If a payment is made late during the term of a lease, there is usually a grace period after the due date, and then only a flat-fee penalty is assessed. In a loan, interest accrues for every day your payment is late, with no grace period. You also might pay penalties at the end of the loan term.

5. With a lease, a business can enlist The Leasing Group to pay vendors and coordinate equipment delivery. The funds are released by The Leasing Group to pay for the equipment on your behalf. With a loan, you would be responsible for obtaining the funds, paying your vendors, and arranging delivery details. Our services can be especially helpful when you’re dealing with several vendors. (Click here to read an article on the benefits of bundling leases from multiple vendors.) In some cases, The Leasing Group can also get vendors to waive a required down payment, because of our solid reputation.

As you can see, a lease today functions much like loan, just with greater flexibility, and in some cases, more favorable terms. Give us a call at (502) 547-2773 to find out how we can help you secure equipment lease financing.

By The Leasing Group

Top seven most frequently leased items

In a previous post, we talked about some items that you might not expect to find in the realm of equipment leasing, but those aren’t the norm. Leasing equipment in general, however, is very common, especially when acquiring the following categories of equipment.

Here are the top 7 most popular items leased:

1. Commercial vehicles. Owning, running and maintaining a fleet of vehicles can cost you a lot of time and money. If your company uses passenger vans, delivery vans, box trucks, tractors and trailers, or any other vehicle to conduct daily business, leasing might be a solid option for you. From nursing homes that transport groups of residents to activities around town to trucking companies, commercial vehicle leasing is a popular financing option.

2. Medical and laboratory equipment. Most consumers have experienced the high cost of health care. Some of that cost can be attributed to the equipment doctors and dentists need to provide effective diagnosis and treatment. It’s expensive. For many practitioners, leasing items such as X-ray machines, lasers, MRI and CT scanners, and surgical tables enables them to keep their costs down. Medical and dental equipment leasing is very popular choice.

3. Restaurant and hospitality equipment. The restaurant business is risky. Many proprietors don’t have the initial capital at hand to purchase stoves, refrigerators, exhaust hoods, tables, seating, and a point-of-sale cash register system. That’s why leasing has been popular among restaurant operators for many years.

4. Construction equipment. Equipment leasing is often the first choice for general contractors, roofers, remodelers, home builders, and excavation companies. Heavy construction equipment can be extremely costly, so these companies often find success in leasing dump trucks, backhoes and other earth movers, survey equipment, loaders and more.

5. Information technology equipment. No matter what business you’re in, you will likely need an IT backbone to support your operations. So it’s no wonder that IT equipment is one of the most popular types of equipment leased. Computers, servers, software, phone systems, networking and cabling are smart to lease.

6. Municipal equipment. Cities and townships are always on a strict, often tight budget and are constantly looking for ways to save their taxpayers money, while ensuring citizens’ needs are properly met. The Leasing Group has assisted many municipalities with leasing everything from police cars and fire trucks to street sweepers and garbage trucks.

7. Manufacturing and industrial plant equipment. An especially costly category of equipment is in the manufacturing and industrial sector, making it a popular equipment leasing category as well. A manufacturer can lease revenue-producing equipment such as stamping and forming machinery, forklifts, welders and conveyor systems. Leasing is a popular choice when a company does not want to use up its operating cash.

The Leasing Group has years of experience with negotiating lease financing on all of the most popularly leased items. If you need to lease any of the above equipment, contact us at (502) 547-2773 to find out how we can help.

By The Leasing Group

Case Study

The Leasing Group works with hundreds of clients across all industries, including municipal governments. Earlier this year, we were contacted by a small city in Kentucky, needing help to obtain a new truck for its volunteer fire department.

The volunteer fire department covers the largest fire district in its county. The department has 23 active members and provides 24-hour coverage for fire, medical, search and rescue, and other emergencies. The department’s fleet includes four fire pumpers, one equipment truck, one utility/hose truck and one brush truck.

The city did not have adequate funds to purchase a new fire truck outright at a cost of $295,000. City officials considered turning to a bond issue to raise the money. However, bonds have a high cost of issue and require a bond counsel to prepare the extensive paperwork required. Also, the process can take several months to complete. In researching other options, city officials settled on leasing instead.
Under a special IRS provision, funds can be loaned to local governmental entities through a lease on a tax-free basis. Provisions are similar to a bond, but don’t have many of the disadvantages. With a municipal lease, fees are low, no bond counsel is required and the transaction can be completed quickly.

The Leasing Group was able to negotiate a favorable leasing contract with a local financial institution that resulted in a savings to the city of about $20,000. The city also was able to acquire the new fire truck in a fraction of the time it would have taken to obtain it through the bond process. 

City officials are happy with the terms of their lease contract. They are even more excited to be able to ensure the safety of their citizens by adding the new truck to the fire department’s fleet so quickly.

Call us at (502) 547-2773 today for help solving any of your equipment financing problems.

By The Leasing Group

6 ways your local leasing company can go the extra mile for you

You’re a manufacturer who needs to invest in a conveyor system. Or you’re a doctor who’s in the market for some refurbished medical equipment. In both cases, it might make more sense to lease than purchase these items for your business. Sure, you can navigate the complicated waters of lease financing on your own, but that takes times and brainpower that would be better spent serving your customers or treating your patients.

The Leasing Group wants you to know you’re not alone. We can ease the burden of equipment lease negotiation and let you get back to work.

Here are few ways we go above and beyond to help you lease the equipment that enables you to serve your customers.

1. Put your best face forward. The Leasing Group can analyze your financial statements and credit history and present them in a way that will maximize your success. In other words, we know what to look for in your financials that will cast you in the best light to our partner lenders. We know what banks want to see on paper, and we can highlight the most essential information when we plead your case for lease financing.

2. One size does not fit all. We use our years of expertise to determine the best type of lease that will best meet your company’s needs. For example, we can determine if you would best be suited to enter into a capital lease or an operating lease. For accounting purposes, these two types of leases are very different. Both types offer specific advantages and disadvantages. A capital lease works as if you own the asset, whereas in an operating lease, you have usage — but not ownership — rights to the equipment. We can also determine if there are other leasing options available to you that you may not even be aware of.

3. Get help with used equipment. Leasing used or refurbished equipment can be challenging. Financial institutions don’t like the liability involved in leasing items that are not brand new. The terms may be more complex, and the negotiations may be more difficult and involve a lengthier process. The Leasing Group has years of experience with used equipment leasing, and we are specially positioned to smooth out a potentially rocky journey.

4. Get a break on your payments. In our negotiations with lenders, we can work out skipped, seasonal or deferred payments during the term of your lease, which can help ease the financial ebbs and flows of your business. A skip lease, or seasonal payment structure allows you to make payments only during certain months of the calendar year. This option is great for businesses that have seasonal highs or are more cyclical in nature. In a deferred lease payment structure, your payments are deferred for a set period of time so you can generate some income through the use of the equipment you’ve leased. The Leasing Group can help you determine if one of these payment options is best for you.

5. Bundle small leases. If you need several small items from multiple vendors, The Leasing Group can negotiate one lease contract that has a single monthly payment. Bundling is a great option with its own unique benefits. We talked about bundling in an earlier article.

6. Leverage our relationships to your advantage. The Leasing Group’s finance experts have a combined 100+ years of experience, and these veterans have solid relationships with local banks. When The Leasing Group talks, banks listen because they trust us and our track record. We are delighted to be able to leverage those relationships to help you get the most competitive, advantageous equipment lease financing available.

The Leasing Group wants to be a partner for all your lease financing needs. Give us a call at (502) 547-2773 to find out how we can help guide your business through an equipment lease.

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Borrowers…What are You Looking For?
Credit Scores are on the Rise
Buying, Borrowing and Leasing
best business funding leasing
#1 Best Idea for Business Expansion