Equipment Leasing: Getting A Quick Lease Approval

Are you considering leasing equipment for your firm, but you are running out of time? Here are a few tips to make sure your company's lease gets approved quickly:

Guard Your Company's Credit Standing

Establish a pattern of paying invoices and bills on time. As with personal credit, a history of prompt payment is one of the most important criteria in extending lease financing. If your company has a dispute with a vendor or credit provider, try to resolve it quickly. Be prepared to discuss the status and reasons for the dispute in detail with the leasing company. Because many leasing transactions require personal guarantees of the principals, it is important that the principals also maintain good credit standing.

Prepare A Lease Package

Include information in the lease package that the leasing company might require. You should include a background write-up discussing your company. Discuss your company's history, the business background of the principals and a detailed discussion of what your company does. Also include a discussion of the competition and your company's accomplishments. Include company financial statements and tax returns, if available. Include a list of credit and trade references. Also include a list of the equipment you intend to lease along with some equipment literature. Finally, include a summary of the lease terms you are seeking.

Identify Credit Enhancements Ahead Of Time

Although you might not need credit enhancements for your lease, it will not hurt to identify them in case they are needed. Possible credit enhancements include: additional equipment collateral; cash equivalent collateral such as CDs, stocks, bonds and cash; other assets such as real estate, revenue contracts, intellectual property rights; personal guarantees.

Have Updated Financial Statements

Although financial statements may not be needed for transactions under $75,000, they are often required for larger transactions. Where possible, these statements should be prepared by a C.P.A. and audited. Most lessors want to see financials covering at least three years of operations and the most recent interim financial statements.

Have an updated business plan with projections. Show a forecast of revenues, expenses and earnings. Include the lease payments as an expense item under the assumption that the lease is approved. Include the key business assumptions used for the plan. Offer a summary of the projections, comparing them to historical performance.

Get Bids From At Least Three Leasing Companies

If you want a competitive lease transaction, it makes sense to get lease quotes from several reliable leasing companies. Look for leasing companies that specialize in the type of lease transaction that you are seeking. There are lessors that specialize in lease transactions under $ 75,000 for instance. Others specialize in certain types of equipment like cars, medical equipment or copiers. Investigate each lessor's background and reputation. Establish a deadline for all bids. Once the bids are in, compare them carefully and look for any terms or conditions that might prove problematic.

Offer To Make Lease Payments Using ACH Debiting

ACH debiting is an automatic payment mechanism established by your firm, the leasing company, and your firm's bank. It permits the leasing company to receive lease payments from your firm's bank account on specified payment dates. This set-up is attractive to leasing companies because it reduces the cost of billing and collecting. Additionally, ACH helps alleviate collection concerns since it creates automatic, on-time payments.

Provide Credit References

Most lessors want to talk to at least three or four vendors or creditors about your company's payment performance and adherence to other business terms. If you have done business with other lessors or lenders, include one or two of these as references. Provide the name and address of each creditor, the contact person and a phone number for each contact.

Getting an approval on your next lease transactions should not remind you of watching grass grow. You can expedite the process considerably by following these easy steps. Be prepared for a quick lease approval.

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Equipment Leasing - 5 Reasons Why Business Owners Prefer Equipment Leasing

Within the past decade, equipment leasing has mushroomed into a multi-billion dollar industry and currently accounts for over one-quarter of all capital expenditures in the United States.

There are five major reasons, or category of reasons why lessees prefer equipment leasing versus a loan for equipment acquisitions.

Economic or Financial

Financial Reporting

Income Taxes

Technological

Flexibility

Let's examine each of these more closely.

A) Economical. The economic attributes of an equipment lease can be considerable. The monthly rentals in the lease can be quite low when compared to the loan payments levied by a bank, due primarily to the impact of the residual value in a lease.

The tax benefits alone that are generated in the transaction will influence the lease payments as well. The lessor can lower the equipment lease payments when receiving value from tax benefits, although, the lessor may use tax benefits to increase its yield.

Longer lease terms also help to lower the lessee's lease payments. The repayment of the equipment cost is spread out over more periods so less payment needs to be charged each period to recover the entire cost.

Equipment leasing also requires little, if any, up-front cash outlays when compared to a bank loan. Many leases require just one payment up front versus the normal down payment requirement on an installment loan for a lessee with a good credit history. The combination of lower up-front and lower subsequent payments helps to preserve working capital.

Additionally, equipment leasing provides the business owner with another source financing, thus allowing them to diversify their funding options.

B) Financial Reporting. Entities are constantly striving to have their financial statement look as strong and healthy as possible to their shareholders and lenders. When a company purchases equipment and finances it with a loan, an asset, as well as the corresponding liability, appears on the balance sheet. If, however, the company chooses equipment leasing over a loan, and that lease is classified as an operating lease, then no asset or liability would appear on the company balance sheet. Hence, the term operating lease has become synonymous with off-balance-sheet financing.

Off-Balance-Sheet financing is sought after for a variety of reasons: to keep debt off the balance sheet, to improve the financial ratios of a company, and to potentially enhance the company's ability to borrow in the future. It is also conceivable that in the early years of the lease, the operating lease will improve the company's reported earnings when compared to a capital lease or purchase.

C) Income Taxes. The value of tax benefits to the lessor can influence the lease payment charged to the lessee. A built-in reciprocity exists in tax leasing, in that the lessor-owner in a tax lease receives the tax benefits given up by the lessee-user and, in return, may pass those benefits on to the lessee in the form of a lower lease payment. The lessee also receives a tax benefit since the lease payments are fully deductible.

Another income tax factor to consider is the Alternative Minimum Tax or AMT, which is very complex. AMT is a penalty tax imposed by Congress. Equipment leasing, not purchasing, helps an organization avoid falling into this penalty situation, thereby saving taxes.

D) Technological. In today's rapidly changing environment, there is always the risk that high technology equipment will become obsolete. Indeed, the risk of technological obsolescence is one of the primary reasons for leasing. Equipment leasing can help lessees transfer the risk of owning equipment which is no longer technologically useful.

The transfer of risk can be accomplished in several ways. The most obvious would be for a lessee to enter into a short-term agreement, thereby requiring the lessor to assume the technological risk through residual value. If the equipment is still useful at the end of the lease term, the lessee could then renew the lease. If the equipment becomes obsolete during the lease term, the lessor may replace it with newer technology through what is know as a takeout, or an equipment upgrade.

In a takeout, the lessor, through its access to the secondary market, will find a new home for the original equipment because equipment that is obsolete to one entity is not necessarily obsolete to another. For new and untried technology, many lessees prefer leasing the equipment on a short-term or experimental-use basis.

E) Flexibility. A company may simply need the use, not the ownership, of a piece of equipment. Leasing can help a company avoid many of the headaches associated with equipment ownership. For instance, leasing can transfer the burden of disposing of the equipment o the lessor, who typically has better access to the used equipment market. The lessee can also contract with the lessor to take care of the other aspects of ownership, such as insurance, maintenance and property tax, by bundling these costs into the lease payment. Many lessees appreciate this one-stop shopping aspect of equipment leasing.

Many owners/managers prefer equipment leasing, as opposed to purchasing, because leasing enables them to acquire needed equipment out of their operating budgets, without the necessity of going through a lengthy bureaucratic capital budgeting and approval process. Lessees may also benefit from very flexible structuring practices such as step or skipped-payment leases. These type of payment schedules are useful to businesses in industries that are seasonal and disruptive to cashflow.

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Save Pocket Expenses by Purchasing Municipal/Equipment Lease

To grow your business without significant out of pocket expenses Equipment leasing is an excellent way. It is best alternative to traditional ways of financing. Municipalities are discovering that municipal leasing is a very attractive and viable way to fund new equipment, technology and infrastructure upgrades. It provides a simple methods which improving the state of cash flow by providing services like education, public safety, water ambulance etc .

Leasing can also include the full amount of the equipment, as well as the service, shipping, installation costs in most cases .Unlike a loan, leasing requires no down-payment and can often be completed by filling out a simple single page application. Cost-effective financing option is better than in today's budgetary challenges. Tax-exempt Municipal lease financing is used to help to meet the needs of your community. Municipal Lease Consultants (MLC) can help you to get the lighting, traffic control, and parking management equipment .It offers municipalities a method of Equipment Financing and Equipment Leasing that is less expensive than bond debt and much quicker.

Leasing is the perfect solution for businesses who want to:
1 Expand and modernize more quickly
2 Install the latest and most efficient equipment
3 Use tomorrow's dollars to improve your business
4 Take advantage of the huge tax benefits
5 Keep your cash liquid, while getting the equipment you need

Benefits of a Municipal Lease Purchase:
1 No long-term debt created
2 Flexible repayment terms and structures to meet budget needs
3 Escrow funding and master lease programs
4 Lower rates resulting from tax-exempt basis
5 Offers an alternative financing option without voter approval
6 Provides project financing
7 Spreads out the cost of an asset or project over the useful life
8 Save capital dollars for other projects for which leasing is not an option

Municipal Leasing is essentially an installment sales contract. It constitutes a current expense of the municipality and does not create debt. In the period of tight operating and capital budgets it is an effective and simple method for providing the capital equipment which needs to provide essential services like: education, public safety, water and sewer etc, while improving cash flow management.

To know more about equipment leasing, office equipment lease, municipal leasing, computer equipment leasing and medical equipment lease, visit http://www.leasewithcrystal.com.

Understanding Asset Finance Leasing

Running a business in a smooth track is not easy if it is not powered by money. Very often money tends to be the determinant factor in upholding and fostering the success of business. The same goes when you want to buy any machinery or equipment for your business. Because of unavailability of sufficient money, you may not want to buy any equipment for business directly from your company's fund.

With the help of asset finance leasing, you can access your desired product without purchasing it. In this way you can say asset finance leasing helps a company to own any asset without investing money for it from their own fund.Asset finance leasing can be best accessed if applied through World Wide Web. It is the platform to reach to unlimited leasing companies of your choice. Just go to any search engine and type your desired question.

You can access asset finance leasing in to two types namely direct leasing and sale and lease back. In direct lease, what you have to do is to select the asset you want and ask a leasing company to purchase it. Now, under sale and lease back, you sell an asset to any leasing company which is already owned by you. The leasing company will then leases it back to you. In both of these two cases, a leasing company itself owns the assets and you are required to return the asset to the leasing company.

Source:- http://ezinearticles.com/?Understanding-Asset-Finance-Leasing&id=529918

Advantages of Equipment Leasing Services

Leasing is a process by which a firm can obtain the use of a certain fixed assets for which it must pay a series of contractual, periodic, tax deductible payments. With leasing services, your business can get access to all the high end equipment with less investment. Business needs proper equipment to function. You can grow business without investing money from your pocket. Equipment leasing provides funds to purchase them.

There are many advantages of leasing equipment. Some of which are listed below:
1.Purchasing equipment with Lease is more beneficial than purchasing it with cash.
2.It is flexible payment plan which suits your operational requirement and allows balancing of the cash flow.
3.No down payment is required
4.You do not have to invest all to get the best equipment.
5.Leasing provides businesses with beneficial stepped payment plans, custom and flexible terms, and seasonal schedules.
6.Even in long term leases, the lessee has to pay only the same interest.

Lease is an ideal solution for start-up companies. Some companies upgrade their equipment periodically and some cannot afford these costs. But with the help of leasing all types of companies can easily upgrade and maintained their equipment if necessary. Before signing the contract you should make sure that the lease period of the equipment is not longer than the life time of the equipment, and the rent paid for lease should not more than the buying cost. Also make sure that the payment made for the lease is also tax deductible.


Source:- http://ezinearticles.com/?Advantages-of-Equipment-Leasing-Services&id=4888802

You Get What You pay For- Equipment Leasing

Leasing an equipment is a financial statement and understanding it is just one part of the equation. Take another one!!

Understanding and choosing the best leasing option for your business is another part of the whole equation. The leasing business is growing -With ample number of new businesses and old ones turning to new assets. But the sad point is (not that much sad) that there are few to help to judge a good lease.

YOU GET WHAT YOU PAY FOR- This is true for leasing too. Leasing is a process where you should know your responsibilities as well as the lessor’s responsibilities. So how do you choose the best type of lease for your business?The first thing you can do is search. Shop all the options you can have. You know about the equipment you want to lease, search related to that and compare the options with different companies. There are some basic figures that are included in any lease option. Few of which are listed below:

• Monthly Installment
• Cost of Maintenance Contract
• Training Available
• Customer Service
• Availability for Software and Hardware Support
• Obsolescence Upgrades
• Term of Contract
• Renewal Terms

In case you want to deliver the best possible results to the company overhead, it is better if you set the terms from the outset. And this is beneficial for long- term leases. Apart from above numbered figures, you should be aware of the hidden cost. Try to get the information at up front. Equipment leasing offers great benefits when it comes to business growth.

For more information read http://equipmentleasing.viviti.com

Future of Equipment Leasing

The future of equipment leasing is firmly hand in hand with business development, small, large and everything in between. Equipment leasing is synonymous with possibilities and what business does not benefit from possibilities? Equipment leasing offers businesses:

• Financial Options
• Growth or Expansion Options
• Business Potential

Financial Options

Businesses need financial capital to grow. Capital provides a business with options from loans to investments. Equipment leasing is tax deductible, whereas initial large investments are deductible the first year but only a percentage thereof is after that. Businesses hire accountants and tax experts to help them maximize their capital. The future of equipment leasing is in the financial options they offer to businesses, large and small.

Growth & Expansion Options

Small businesses and the self-employed may find their growth and expansion options limited without the options equipment leasing can provide them. From construction to accounting to medicine, equipment leasing provides a future for both. The rapid growth industry for equipment lessors is matched only by the needs of lessees.

What a company needs more than anything else is capital to invest not only in themselves, but also their future. Equipment leasing keeps the capital in their pockets and helps physicians, engineers, computer specialists and even writers develop their businesses. The future of equipment leasing is tied firmly to the package that is the American Dream.

Business Potential

While financial, growth and expansion options are definitely part of the future of equipment leasing. There is an untapped source that will find its future in equipment leasing. That source is the business potential in the entrepreneur. More and more business entrepreneurs are leaving the wildly hectic corporate world to start their own business.

When you go into business for yourself, there are a lot of trepidations. First and foremost, starting a business can be a risk for the individual and the family. Equipment leasing can help an entrepreneur minimize their risks, plan for a future and deal with unforeseen eventualities.

Equipment leasing can be the difference between achieving a dream and being stuck in a dead-end job. There is a surge in the growth of small business in the country, specializing in personal services from web building to direct marketing to selling homemade clothing. Equipment leasing can make all those possibilities happen and for fraction of the cost it would take to purchase the equipment outright.

Farmers and Other Opportunities

There's a lot of focus placed on equipment leasing for private physicians, medical practices, construction companies and computer and Internet technologies. Another untapped market that benefits from equipment leasing is farmers that work small and large farm operations. Equipment leasing can keep the small farmer moving on a tractor or helping to rebuild a damaged barn.

Large equipment like tractors, backhoes, ditch witches and scoops are a hefty investment. Farms are a tricky operation and take a lot of backbreaking work and labor investment. When a piece of heavy equipment breaks down, farmers have a choice to repair it or do without. If they can't affect the repairs themselves or afford them, then it is more than likely they can't afford to go out and buy a new one. Equipment leasing would provide the farmer not only with the equipment to get the job done, but also to the maintenance support without the huge output of cash.

The future of equipment leasing is in business, industry and primarily people. It only takes a small investment to get started and that small investment returns the dividends to the lessee as their business and financial opportunities grow.

Source:http://ezinearticles.com/?Future-of-Equipment-Leasing&id=230881