Advantages of Leasing

The new tax law affects nearly every aspect of your business-including the way you handle equipment acquisition.

Under IRS Section 179, equipment purchases, up to $100,000 can be expensed (deducted from taxable income) if installed by December 31^st  Finance leases qualify for this deduction in their year of inception.  The 2003 law quadruples the amount of qualified property that can be expensed under IRS Section from $24,000 to $100,000 for tax years 2003, 2004, and 2005.

The total cost of property that may be expensed for any tax year cannot exceed the total amount of taxable income (determined after application of investment limitation) derived from active conduct of any trade or business during the tax year. Costs disallowed under this rule may be carried forward an unlimited number of years subject to the ceiling amount for each year.

 The maximum amount of asset cost that can be expensed by year is:

• $24,000 for 2002
• $100,000 for 2003,2004,and 2005
• $25,000 for following years

Other advantages are as follows:

Fully tax deductible
You can usually deduct your monthly lease payment as an operating expense, under rental equipment

 

Lease Terms to Suit Your Needs
Leasing, which is simply dollars-per-month financing, helps fit a monthly payment into your budget, which can be flexible, to meet your business needs.,  We offer ninety day no payments. Seasonal payment programs and step payments programs to help you get the equipment you need today.

 

Provides 100% Financing
You may include maintenance/service contracts, freight, install charges, software, training and other related equipment.

 

Fixed Payments
Your monthly lease payments are fixed for the entire term of the lease. You decide the term and structure of the lease in the beginning. By the payments staying the same you can budget and manage equipment dollars for the months or years ahead.

 

Protection of Future Borrowing Capacity
True leases area means,  "off balance sheet financing" and is frequently noted only in their footnotes.  By not showing as a liability on your financials, or on personal credit reports, a lease will not hinder your future borrowing power with the banks.

 

Leasing Provides Hedge Against Inflation
New and up-to-date equipment is obtained today and paid with tomorrow's dollars.

 

Third Source of Financing
Rather than tying up your bank line of credit or using operating capital, you will be establishing an additional line of credit for the business.

 

Little or NO Down Payment
Leases typically only require one or two months in advance.  A traditional equipment loan will require at least a 10%-25% down payment and is secured by all your assets.  A lease is only secured with the equipment listed on the lease.

 

Several Purchase Options are Available
At the end of the lease, you may purchase the equipment at an agreed upon option or simply return the equipment to the funding source.

 

Is Leasing Popular?
An estimated 80% of US companies lease, and that percentage covers the widest spectrum of all industries, from start-up companies to old established organizations.  As companies grow larger, their need for a variety of financial services also grows larger.

Please consult your tax advisor regarding IRS Section 179,the accelerated depreciation opportunity and all accounting procedures.