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business leasing success approved

By The Leasing Group

“We’ve Got Cash to Lend”

We haven’t heard a banker say that in a while, at least not in the last five difficult years.  But that quote comes directly from a recent article in our local business newspaper.  The quoted banker was trying to make a point.  Once crushed by bad real estate loans, his bank has emerged stronger than ever with money available for lending, including loans to small and mid-sized businesses.

 

Public perception would tell you that banks are still reeling from the financial crisis; that bank examiners continue to place barriers between banks and their customers; that banks remain hunkered down for fear of making many of the same lending “mistakes” and getting penalized for risky underwriting.

 

In reality, we find this perception only partially true.  Yes, examiners are difficult, sometimes even unreasonable, and yes, there is still a fear of repeating questionable lending practices of the past.  But there is also a realization by bankers that loan growth must again lead them to profitability, only this time growth will extend beyond real estate lending to business equipment loans and leasing.  This is great news!  The path to loan diversification leads directly through small and mid-sized entrepreneurial companies.

 

As the economy continues to recover and business owners regain confidence, they will pull delayed growth plans from their shelves.  When they do, banks stand ready and willing to again loan idle funds.

 

In the future, we can expect more banks to scream “Come see us.  We’ve got cash to lend.”

 

Leasing Questions? (502) 456-2800

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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.

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

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

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

What businesses need to know to qualify for credit

So, you’re considering an equipment lease for your business, and you’re starting to look into how the credit process might work. You probably know that your financial history plays a big part in qualifying you for lease financing. But did you know other factors can affect your credit and, in turn, your ability to get lease financing?

Consider the following before you apply for a lease.

First, do your financial statements show profitability? Banks want to see profitability over the course of several years. Banks also look for positive cash flow and a positive net worth on your balance sheet.

Sometimes a negative net worth can be offset by current profitability. The Leasing Group can help sort through any holes or discrepancies in your financial statements and present your company’s economic situation in the most favorable light.

Next, how long have you been in business? To have a viable credit history, it helps to have a business history of at least three years. However, if your business is relatively new, you might still be approved if you can show strong personal credit and liquid assets.

What about cash flow coverage? If you take your operating cash flow and divide that by existing debt payments, including principal and interest, is the result 1.25 or greater? If not, lenders might have a hard time justifying an addition to your debt load.

And finally, do you, as the business owner, have a credit score of more than 700? Are you sure? Have you checked your score recently? Small, unpaid or disputed medical bills often lower your score often unbeknownst to you. The Leasing Group can help you sort out personal credit problems before you apply for a lease.

If your company is a bit iffy on a couple of the above points, let The Leasing Group present your financials and increase your chances of approval. Our experienced advisors understand lease financing and can often find creative ways to enhance your chances of approval. For example, if you’re looking to lease a revenue-producing piece of equipment, we can demonstrate how it will positively impact your financial statements.

If your credit picture is a little blurry, let The Leasing Group take a new look at it through our expert eyes. Contact us at (502) 547-2773.

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.

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business leasing success approved
“We’ve Got Cash to Lend”