Equipment Funding

Equipment leasing is a form of funding that more and more businesses are turning to when they are in need of equipment, software, or furniture. Leasing, as opposed to purchasing, is often the preferred arrangement for start-up and growing business because large amounts of collateral are not necessary to secure the property.

Choose your new or used equipment from any vendor, private party or auction house and negotiate the price and then one of our Business Capital Specialists will help you select the best equipment lease option.

By taking title through leasing, rather than putting a lien against the equipment via traditional bank loan financing, the equipment payments are not considered a liability and are not reported to credit bureaus.

With a minimal expense your business can have access to necessary equipment. Lines of credit are also left open when leasing which means that money can be used for other expenses that are necessary for success.

Criteria

  • All machinery and equipment will be considered.
  • Funding after equipment has been purchased is called
    a “sale-leaseback” and this type of deal is only possible with
    equipment that has been purchased within the last 90 days.

Required Documents

  • Equipment Type & Price
  • Personal Financial Statement
  • Last 2 years personal tax returns
  • Last 2 years business tax returns
  • Current business financial statement and/or projection on new business
  • Previous 2 years financial statements. If only in business for 2 years
    then submit this information for 2 years
  • Resume on all key principals

Programs:



Operating Lease

The most classic equipment leasing option available, an operating lease structures the lease agreement to provide 100% tax deductibility on lease payments as a capital expense. The leased equipment is classified as a rental, allowing the lessee to transfer obligation of the equipment to the lessor at the end of the term.



Capital Lease

The optimal choice for long-term equipment plans and intended eventual ownership,a capital lease classifies equipment as being owned by the lessee, allowing the lessee to claim tax deductions on the equipment depreciation. A capital lease usually provides a more attractive purchase incentive at the end of the lease term.



Equipment Finance Agreement (EFA)

A method of equipment financing with fixed payments for a predetermined number of months, where the borrower owns the equipment and the lender merely retains a security interest through the transaction.

This sort of agreement is used as a method of funding equipment after the lessee has already received and paid for the equipment, but prefers to spread the expensed capital over a payment term. Both the depreciated value of the equipment and the interest on finance payments are tax deductible to the borrower.The equipment funding agreement is an equipment loan.