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Tag : Local financing

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

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 a free lease term analysis

Have you recently started the process for equipment lease financing? We’re sure you’ve carefully looked over all the aspects of your lease, but we would also encourage you to take advantage of our expertise. The Leasing Group is offering a FREE lease term analysis, so why not let us look over your lease terms before you sign? Let us read the fine print so you don’t have to.

Many of our clients come to us, confident they have caught every loophole and technicality in their lease, only to find out that they are missing something buried in the deep recesses of such a substantial document.

For example, a commercial pharmacy client was all set to sign on the dotted line for a lease covering a medication dispenser. When the advisors at The Leasing Group examined the lease with our expert eyes, we found that the pharmacy was being double taxed. The sales tax had been assessed at the time of purchase, and then a second time in their lease payments. The additional cost would have exceeded $15,000.

Yes, these are some dramatic savings, and we can’t promise those results for every client. In fact, your lease is probably just fine. But why take the risk when you can get a free assessment? Call The Leasing Group today at (502) 547-2773. Or click
here
and fill out our quick request form.

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.

By The Leasing Group

4 reasons to diversify your relationships with financial institutions (Or why you’re not cheating on your banker)

If you’re a successful business owner or operator, chances are you have a good relationship with your bank. Perhaps you feel a certain allegiance to a particular financial institution, so it’s always going to be your first choice when your financing needs increase.

Loyalty to a single bank is great, but might hinder your long-term ability to grow.

Here’s why.

1. It makes you look good. Believe it or, spreading your eggs over several baskets helps build and strengthen your credit history and credibility, which actually improves your chances of getting the financing you need. Similar to diversifying your stock portfolio, extending your credit among multiple institutions reduces your risk. If you have a line of credit and established relationship with only one bank, what would you do if they turn you down for additional financing? It could happen if you’ve reached your ceiling with that particular bank. It’s better to diversify now rather than hit a wall later that could negatively impact your growth.

2. It prepares you for growth. Every bank has limits on the credit it can offer your company. Just like a child who outgrows his clothes as he gets bigger, you may outgrow one bank. But if you’ve diversified, it’s unlikely you’ll outgrow several banks at the same time. One bank may not be able to meet your needs on a particular equipment lease, but another one can. It might be a simple matter of timing. Your credit rating stays the same, but each financial institution looks at it through different eyes because they all have different parameters.

3. It helps you get the most competitive interest rates. Just like shopping around for the best price on the equipment you plan to lease, it makes sense to shop around for the best interest rates. Diversification inspires healthy competition among the financial institutions. You don’t need to navigate those waters alone. The Leasing Group can leverage its strong relationships with local banks to get you the best financing terms.

4. Your banker isn’t an “ol’ ball and chain.” Unlike a possessive spouse, a banker doesn’t want to tie you down and hamper your ability to spread your wings. In fact, it is to a financial institution’s benefit that their clients grow. And don’t worry about any jealousy. Lease financing is transactional; it is not representative of a comprehensive banking relationship. Kind of like a fling versus a marriage. Banks don’t get insulted if you have a few flings.

The Leasing Group can work with you to diversify your financing so you’re prepared to take your company to the next level of growth. Call us at (502) 547-2773 to find out how.

By The Leasing Group

5 ways bundling equipment into one lease will make your life easier

You own a company that’s been up and running for a few years, and business is humming along. You take a look around the office and notice you need to replace some, but not nearly all, of your basic office equipment. You have 10 copiers, but only two are on their last legs. Your conference room table is getting shabby, but the chairs are still in great shape. Your shared color printers are in good condition, but a few of your executives have burned up their black-and-white desktop HPs.

You already know you’d prefer to lease all of these items rather than purchase them outright, but on their own, each piece is valued at much less than $20,000.

Did you know that, with the help of The Leasing Group, you can package all of this financing under one equipment lease? Here’s why bundling can be a great solution for your equipment leasing needs.

1. One lease means one negotiation. You likely can’t get your conference room table from the same vendor who sells copiers, so you’d have to negotiate terms with each vendor, and/or the independent financial institutions that provide their lease financing. That can be a time-consuming hassle. A better solution would be to let The Leasing Group coordinate all of this for you. We can manage all leasing details with multiple vendors, negotiate with our partner banks to get you a competitive, single rate, and bundle all of the equipment you need under one leasing contract with a one set of terms. We’ll juggle purchase orders, invoicing and deliveries so you don’t have to.

2. A single payment. If you were to lease the four items you need individually, you would have four monthly payments to keep up with. Your financial statements are complicated enough. It’s a no brainer that if you bundle the four items under one equipment lease, you (or your bookkeeper) will need to worry about making only one additional payment per month.

3. Cost effectiveness. Another obvious benefit of a single, bundled lease is that you’ll save money in the long run. Basic math dictates that a single lease, with a single interest rate and a single payment, makes more sense than four leases, with four rates and four payments. One lease is a much more economical option.

4. One credit approval. If you are applying for lease financing for four separate equipment leases, you have to get four credit approvals. That’s a lot of time and paperwork. Wouldn’t you rather been spending that time cultivating your business? We thought so. If you work with The Leasing Group to bundle your small equipment leases into one contract, you’ll only have to go through the laborious credit approval process once. Less time wasted and fewer headaches means you can get back down to business faster.

5. Your credit stays intact. Every time a credit bureau is contacted by a vendor or financial institution to check up on your credit, your credit rating takes a ding. If you need credit approval for four leases, that’s four dings. Under a bundled lease, you only need one credit approval, which translates to only one credit check. One ding instead of four means your credit rating will be minimally affected.

If you think your equipment lease bundling might be a good solution for your business, contact The Leasing Group at (502) 547-2773 for more information about how we can help.

By The Leasing Group

Four Reasons to Seek Local Financing for Your Business Equipment Lease

When you’re looking into leasing equipment for your business, your first inclination might be to apply for financing with a national bank. That’s an OK route to go if you’re a multi-million dollar firm, but if you’re a small to medium-sized business, a better bet would be to seek out local financing sources.

Here’s why:

  1. Community banks have a vested interest in lending to small businesses in their local area because their focus is on the needs of businesses in their own backyards. Their mission is to channel most of their loans to the neighborhoods where their customers live and work, to fuel local community growth.
  2. Community banks are willing to consider individual circumstances, character and discretionary spending when making loans. They understand issues that might contribute to lower credit scores and are less rigid in their requirements. Local financiers are sometimes less insistent that you have two-plus years of financial statements. Big, national banks are more stringent with their funding parameters and often laser their focus only on credit scoring.
  3. At local banks, financing approvals are made by people who live in your community, have face-to-face relationships with you (their customer) and really understand local needs. As a result, decision-making often happens much faster. Your local bank is also often more willing to up your financing as your business grows and your equipment financing needs increase.
  4.  You can get the same services at a lower cost through a local financing source. Most locally owned financial institutions offer the same array of services as their larger national counterparts. Average fees and interest rates at local banks are often substantially lower than at big banks. Community-based banks often offer better, more reasonable financing terms.

The Leasing Group has strong relationships with a wide selection of local banks and other financial institutions. Let us work with you on securing local financing for your business equipment leasing needs. Contact us at (502) 547-2773.