Financing Your Equipment
Lease or Loan? The choice is yours. We do both!
Loan Benefits
~ Normally requires an up-front down payment ranging from 15% to 20%.
~ Length of financing available is the same for loans and leases
~ May allow you to fully deduct the cost of the equipment up to $112,000
(2007 limit) rather than depreciating it over five years. [See your Tax
Professional for details]
~ Allows for early prepayment with only a small prepayment penalty.
~ State Sales Tax is paid at the time of purchase
Lease Benefits
~ 100% financing
~ Flexible Payment Plans
~ Low Down/No Down Payment
~ Length of financing available is the same for leases and loans
~ True leases generally allow for 100% of the monthly payment to be expensed,
whereas loan financing would allow expensing of interest cost and depreciation
only. [See your tax professional for details]
~ Preserves Working Capital and Cash
~ Simplified Accounting
~ State Sales Tax is spread over the term of the lease
How Does Leasing Work
Leasing is not much different from buying. With a pre-approval from Dolsen Leasing Company, you are ready to choose the right equipment for your business from the vendor of your choice. This allows you to negotiate the price, terms of the warranty, installation, etc.
Once these decisions are made, and the terms of the lease agreed upon, Dolsen Leasing Company will purchase the equipment and lease it to you. At the end of the lease, you may return the equipment, re-lease it, or purchase it for the residual value.
Myths About Leasing
Myth 1: "I need to have perfect credit to lease."
While good credit will increase the likelyhood of approval, leasing is a good alternative for customers with less than perfect credit. Many factors are considered; such as time in business, average business checking balance, and comparable business credit.
Myth 2: "Leasing costs more than traditional financing."
In most cases, leasing actually costs less than traditional financing. Typically, up front costs are limited to first and last monthly payments. When the tax advantages of leasing are considered, the cost is usually lower than traditional financing. The real cost of financing is losing cash flow.
Myth 3: "I can only lease new equipment."
The majority of equipment that is financed through leasing is used. Equipment age and terms can be tailored to meet our customer's needs.
Myth 4: "Leasing is difficult."
The truth is actually quite the opposite. Qualifying for and completing the lease transaction is, in most cases, easier that traditional bank financing.
Myth 5: "I can use my cash and buy it today."
Although you may have the capital to purchase new equipment today, what happens when your business needs that money tomorrow? Spending your capital to purchase equipment may put you in a difficult position later on. People who chose this route often find themselves using credit cards with 18-20% rates to keep their businesses operating optimally.
