Benefits of Equipment Leasing
How does your business pay for additional equipment?
You could pay cash, but since working capital is the most important element in a successful business, that would not be prudent. Also, equipment should be thought of like an employee. It works for you and hopefully earns profits. You would not pay your employees years in advance, yet that is exactly what you are doing when you pay cash for equipment. Leasing allows you to pay for your equipment as it works and produces for you and then pays for itself.
You could take a loan from your bank. However, every business, regardless of its size or credit rating, has a limit that they can borrow from the bank. The limit may be dictated by the size of your company or, in some cases, by the size of the bank. For that reason, hard assets like equipment and vehicles should be financed elsewhere, leaving your lines of credit open for an emergency. The obvious choice is Leasing, which has the added benefit of offering 100% financing and longer terms than traditional bank loans.
If structured properly, a Lease can have some very important tax benefits. If structured as a "true" Lease, the payments could be considered a rental resulting in a 100% expense write-off. At the end of the year you would simply total your payments and deduct them entirely as an expense. This could result in a much more rapid write-off than interest expense and depreciation.
True leases may not have to be shown on your financial statement as a liability, but may have to be disclosed in footnotes. This keeps your financial statement from becoming overloaded with debt and is important if your bank lines require maintaining certain ratios.
The biggest benefit, however, in dealing with Iron Capital is that you can get the most money with the least information....
UP TO $150,000 or more with Only a ONE-PAGE Application!
Can your bank do that?
*Please consult with your CPA or Tax Preparer regarding tax benefits. Iron Capital, LLC cannot give tax or accounting advice and the above mentioned statements are clearly for informative reasons only and are not to be taken as fact.
