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We lease equipment...all kind of equipment for growing businesses, including:

Transportation, Printing, Mining, Computer, Forestry, Agricultural, Marine, Aircraft, Roadbuilding, Construction, Medical, Industrial

Call us about your leasing requirement.

What is leasing?
A LEASE is a non-cancelable rental for a specific time at a specific payment.

Leasing has become a very popular way for businesses of all kinds to obtain the benefits of using assets without the restrictions and drawbacks of traditional financing. According to the Equipment Leasing Association, nearly $250 Billion of assets are leased each year. Is leasing right for you?

Evaluate Your Financing Options

We can structure a lease to meet your organization's specific needs. To decide if leasing is the best option in your case, you should first understand those needs and ask yourself these questions:


How does this equipment make my business more competitive?

What is the most efficient use of my cash flow to pay for the equipment?

How long will I use it?

What will my equipment needs be in the future?


You will want to factor the cost of leasing into your evaluation. Generally, the cost of leasing is comparable to those of other financing options when looking at the whole transaction. It is important to point out that leases are not loans. As a result, their costs are figured differently from those of loans. Leases take into account that the equipment is worth something at the end of the lease term. This is called its residual. Residuals are built into lease pricing, usually making the lease payments lower than a loan.
 
To compare lease products, it is better to compare monthly payments than to try to compare loan interest rates with lease rates. On a cost-of-capital basis, leasing may be the least expensive option.
 
The funding companies we work with offer competitive rates for a number of reasons. Lessors, with their volume purchasing power, can secure attractive financing deals and pass along the savings to the lessee. The lessor is also better able to take advantage of the deduction for depreciation expense that comes with ownership - this lowers the funding company's cost of capital and this gets passed along to our clients.
 
We "shop the market" on your behalf to ensure we get you the absolute best rate for your situation. We have hundreds of leasing sources worldwide and will work hard to ensure you are satisfied.
 
 

Some Common Leasing Questions

 

Who Leases

    North American business (and government) has become aware of the significant benefits of leasing resulting in an avalanche of leases for everything from office computers to jet airplanes. Any business can lease, yours included. While it is easier to obtain leasing if you have been in business for over 3 years, there are many cases where this is not required.

    What Kind of Equipment Can Be Leased?

    Virtually any equipment can be leased for every industry sector that conducts business.

    Can I Lease Software?

    Yes. Software leasing is becoming more popular, especially as the costs associated with buying software increase. We can arrange for a custom software lease for you and work with your vendor to ensure it meets your needs.

    Are There Any Tax Advantages in Leasing

    The end of lease arrangements determine whether a lease qualifies for tax benefits. We always advise our customers to consult their tax and legal advisors for advice on what lease terms will give them the most advantages. True operating leases allow you to write off the cost of lease payments.

    How Long Can a Lease Run?

    Typically leases run for 24 to 66 months, however if you have a special need, discuss it with us.

    What Are the Advantages of Leasing

    There are numerous advantages to leasing: These include:

  • Tax treatment. The IRS and CCRA do not consider an operating lease to be a purchase, but rather a tax-deductible overhead expense. Therefore, you can deduct the lease payments from your corporate income.
  • Bank Line. A lease does not use up your bank lines of credit.
  • Balance sheet management. Because an operating lease is not considered a long-term debt or liability, it does not appear as debt on your financial statement, thus making you more attractive to traditional lenders when you need them.
  • 100 percent financing. With leasing, there is very little money down - perhaps only the first and last month's payment are due at the time of the lease. Since a lease does not require a down payment, it is equivalent to 100 percent financing. That means that you will have more money to invest in revenue-generating activities.
  • Immediate write-off of the dollars spent. Leasing payments are treated as expenses on a company's balance sheet, therefore, equipment does not have to be depreciated over five to seven years.
  • Flexibility. As your business grows and your needs change, you can add or upgrade at any point during the lease term through add-on or master leases. If you anticipate growth, be sure to negotiate that option when you structure your lease program. You also have the option to include installation, maintenance and other services, if needed.
  • Customized solutions. A variety of leasing products is available, allowing you to tailor a program to fit your month-to-month or year-to-year cash flow needs. You are able to customize a program to address your needs and requirements - cash flow, budget, transaction structure, cyclical fluctuations, etc. Some leases allow you, for example, to miss one or more payments without a penalty, an important feature for seasonal businesses.
  • Asset management. A lease provides the use of equipment for specific periods of time at fixed payments. The lessor assumes and manages the risk of equipment ownership. At the end of the lease, the lessor is responsible for the disposition of the asset.
  • Upgraded technology. If the nature of your industry demands that you have the latest technology, a short-term operating lease can help you get the equipment and keep your cash. Lease equipment that you expect to depreciate quickly. Your risk of getting caught with obsolete equipment is lower because you can upgrade or add equipment to meet your ever-changing needs.
  • Speed. Leasing can allow you to respond quickly to new opportunities with minimal documentation and red tape. Many leasing companies can approve your application within one or two days and you can have your equipment very quickly.
    Improved cash forecasting. By leasing equipment you know the amount and number of lease payments over the life of the leasing period, so you can accurately forecast cash requirements for your equipment.
  • Flexible end of term options. There are several options for disposing of equipment after the lease term ends including returning the equipment, renewing the lease or purchasing the equipment.
  • Tax benefits. Lessors often pass the tax benefits of ownership on to the lessee in the form of lower monthly payments.
  • Improved earnings. Operating lease accounting provides a lower cost than a capital lease in the early years of a lease.
    Lease vs Buy With Borrowed Money
    Loan
    Lease
    A loan requires the end user to invest a down payment in the equipment. The loan finances the remaining amount. A lease requires no down payment and finances only the value of the equipment expected to be depleted during the lease term. The lessee usually has an option to buy the equipment for its remaining value at the end of the lease.
    A loan usually requires the borrower to pledge other assets for collateral. The leased equipment itself is usually all that is needed to secure a lease transaction.
    A loan usually requires two expenditures during the first payment period; a down payment at the beginning and a loan payment at the end. A lease requires only a lease payment at the beginning of the first payment period which is usually much lower than the down payment.
    The end user bears all the risk of equipment devaluation because of new technology. The end user transfers all risk of obsolescence to the lessors as there is no obligation to own equipment at the end of the lease.
    End users may claim a tax deduction for a portion of the loan payment as interest and for depreciation, which is tied to IRS depreciation schedules. When leases are structured as true leases, the end user may claim the entire lease payment as a tax deduction. The equipment write-off is tied to the lease term, which can be shorter than IRS depreciation schedules, resulting in larger tax deductions each year. The deduction is also the same every year, which simplifies budgeting (equipment financed with a conditional sale lease is treated the same as owned equipment.)
    Financial Accounting Standards require owned equipment to appear as an asset with a corresponding liability on the balance sheet. Leased assets are expensed when the lease is an operating lease. Such assets do not appear on the balance sheet, which can improve financial ratios.
    A larger portion of the financial obligation is paid in today's more expensive dollars More of the cash flow, especially the option to purchase the equipment, occurs later in the lease term when inflation makes dollars cheaper.
     

    Leasing vs Paying with Cash

    · Leasing requires a simple one page credit application
    · Leasing Frees Up Capital
    · Leasing is a Hedge Against Inflation
    · Leasing provides 100% Financing
    · Leasing has Potential Tax Advantages
    · Leasing allows Easy Add-ons and Trade-Ups
    · Leasing Preserves Credit Lines
    · Leasing provides you with Fixed Payments
    · Leasing requires No Down Payments
    · Leasing requires No Additional Collateral
    · Leasing gives you the Ability To Work Within your Budget
    · Paying Cash Depletes Cash Reserves
    · Paying Cash has a Negative Impact on Balance Sheet
    · Paying Cash Disregards Time Value Of Money and Reduces Cash Asset Position

    What are the Differences Between a Lease and a Loan?

  • A loan requires the end user to invest a down payment in the equipment. The loan finances the remaining amount. A lease requires no down payment and finances only the value of the equipment expected to be depleted during the lease term. The lessee usually has an option to buy the equipment for its remaining value at the end of the lease.

  • A loan usually requires the borrower to pledge other assets for collateral. The leased equipment itself is usually all that is needed to secure a lease transaction.

  • A loan usually requires two expenditures during the first payment period; a down payment at the beginning and a loan payment at the end. A lease requires only a lease payment at the beginning of the first payment period which is usually much lower than the down payment.

  • The end user bears all the risk of equipment devaluation because of new technology. The end user transfers all risk of obsolescence to the lessors as there is no obligation to own equipment at the end of the lease.

  • End users may claim a tax deduction for a portion of the loan payment as interest and for depreciation, which is tied to IRS depreciation schedules. When leases are structured as true leases, the end user may claim the entire lease payment as a tax deduction. The equipment write-off is tied to the lease term, which can be shorter than IRS depreciation schedules, resulting in larger tax deductions each year. The deduction is also the same every year, which simplifies budgeting (equipment financed with a conditional sale lease is treated the same as owned equipment.)

  • Financial Accounting Standards require owned equipment to appear as an asset with a corresponding liability on the balance sheet. Leased assets are expensed when the lease is an operating lease. Such assets do not appear on the balance sheet, which can improve financial ratios.

  • A larger portion of the financial obligation is paid in today's more expensive dollars. More of the cash flow, especially the option to purchase the equipment, occurs later in the lease term when inflation makes dollars cheaper.

    Do I Qualify?

    Most businesses qualify for leasing. Call and find out or fill out our easy application form and we'll call you with our assessment.

    Types of Leases

    There are two main types of leases, operating and finance (or capital) lease.

    With an operating lease, the term is shorter than the expected useful life of the equipment. Rental payments do not cover the equipment cost for the lessor during the initial lease term. This type of lease is popular for high-tech equipment, because shorter term leases help equipment users stay ahead of equipment obsolescence. The lessor uses its equipment remarketing expertise to subsequently find other users for the returned equipment, something the typical equipment user does not have time or ability to do.

    With a finance lease, the term is longer, more nearly covering the useful life of the equipment. Rentals tend to be lower because of the longer term and less residual risk.

    From an accounting standpoint, an operating lease is the simplest type of lease for you to account for because you only expense rentals; there is no requirement to add the asset to the balance sheet, as long as the footnotes to the financial statements indicate the amount of your firm's lease rental obligations.

    Another lease product you may find beneficial is the sale-leaseback: You purchase the equipment you need and use it for a period of time before selling it to a lessor. After selling the equipment, you then lease the equipment. This is another way to free up your operating capital.

    On smaller equipment leases worth thousands of dollars, leases tend to be more standardized. Above that cost range - several hundred thousand into the millions - variations appear more frequently. A leveraged lease on a "big ticket" acquisition such as an airplane, may include several customized provisions and options that would not appear in a typical lease for a smaller amount. Therefore, flexibility is a product of the size of the lease.
In general, the factors to be considered in choosing the correct type of lease are:

  • How long you want to use the equipment;
  • Your tax situation;
  • Your cash flow; and
  • Your company's specific needs as they relate to future growth.
  • You also will need to determine what happens at the end of the lease. Your options can include returning the equipment to the lessor, purchasing the equipment at fair market value or a nominal fixed price, or renewing your lease.
 
    In general, most companies can benefit from a properly structured lease. We can help you choose the appropriate type of lease, term and any special provisions to suit your unique situation.

 

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