Leasing non-titled equipment or titled vehicles may be a new concept to many small business owners. Unfortunately, being uninformed can cost you time, hurt your credit score, and leave you feeling hopeless.
Banks and other companies have very strict lending guidelines, and cannot stray within an inch of them. Luckily for us, we find promise in people, because quite frankly, we know that life can get in the way. When we decided to provide in-house funding, we finally realized the large impact we were having on the masses.
Minimal Initial Expense
Depending on the agreement we can come to with you, we allow for a low initial expenditure. Accordingly, we submit the assets to the vendor and all you are responsible for is submitting a miniscule advance payment and/or security deposit + any document fees to transfer titles, etc. This keeps you from tying up your hard earned cash in large equipment and back where you want it – your bank account.
Along with keeping your bank account bursting, an entire lease payments can usually be deducted as a business expense on your tax return (Be sure to check with your tax professional to ensure your lease applies before implementing this procedure). If so, you have just reduced the net cost of the lease! This is largely different from a loan, and one of our biggest perks, because there is no interest component. Let’s see your bank try to do that!
Long Term Benefits
If you know you are going to need a piece of equipment for the term of the lease, then you can take advantage of making payments rather than buying it outright! This keeps you from dropping hundreds of thousands in cash, and keeping it nearby for the “what-ifs” in life.
For example, let’s look at Frank who just opened an ice creamery. He has only been in business for 6 months, so no bank will even turn they heads at him, but needs a new ice cream machine to keep up with demand during the summer months. He plans on being open indefinitely, and has $6,000 in the bank. He can choose to buy the machine for $5,000, only leaving a $1,000 cushion, or he can lease the equipment through American Leasefund. He chooses to lease it and has plenty of money in the bank in case any building repairs, wages, or life expenses need to be funded.
Winter hits, and nobody wants his ice cream, so he has to dip into some of his cushion that would not exist had he spent all of the money up front. Summer comes around again and business is booming so much so, that he needs another machine. He is able to lease another piece of equipment, keep his bank account full, and has enough cash flow after all of his lease payments to take his family on a tropical vacation.
Frank made a smart decision because he knew he would need the machines for longer than his lease term, and making payments allowed him to spend his extra money on any emergencies and personal affairs.
In summary, leasing commercial equipment and vehicles enables lessee’s to get the most out of their business, while keeping assets in the bank rather than in the form of equipment. In fact, American Leasefund, Inc. continuously strives to complete transactions with the individuals that deserve a more in-depth look.
So even if you’ve heard “no” one too many times, give us a call and we promise to do our best to get your business prospering.