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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

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.