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Business Leasing

Having just completed the Canyon Leasing Training program (www.CanyonLeasing.com) I am embarking on building my own Leasing Company. In hopes of developing relationship with small business the acquire equipment I have outlined the benefits of leasing in this article.

While 80% of all US businesses have leased equipment at one time or another, some may not be aware of the benefits, nor of the hidden costs involved with leasing. Sometimes leasing equipment, instead of buying it, can be the best option for your business.  However, there are many variables that should be considered, including costs, use restrictions, and legal implications.

Leasing operating equipment, such as computers, vehicles, and machinery, often makes more sense than buying. However, while favorable leases are often good bets, unfavorable ones can easily sink an emerging venture. While doing your legal homework can help prevent bad deals, it’s always a good idea to have a lawyer look over a lease before signing it.

Benefits of Leasing Equipment

1.      Leasing is Flexible.

Companies have different needs, different cash flow patterns, and sometimes irregular streams of income. For instance, startup companies typically are characterized by little cash and limited debt lines. Mature companies might have other needs – to keep debt lines free, to comply with debt covenants, and to avoid committing to equipment that may quickly become obsolete. Therefore, your business conditions – cash flow, specific equipment needs, and tax situation may help define the terms of your lease. Moreover, a lease provides the use of equipment for specific periods of time at fixed rental payments. Therefore, leasing allows you to be more flexible in the management of your equipment.

2.      Leasing can be Cost-Effective.

Equipment is costly and some of the costs are unexpected. When you lease, your risk of getting caught with obsolete equipment is lower because you can upgrade or add equipment to best meet your needs. Further, your equipment needs can change over time due to changes to your company, such as diversification. Leasing allows you to stay on the cutting edge of technology.

3.      Leasing Has Tax Advantages.

Rather than deal with depreciation schedules and Alternative Minimum Tax (AMT) problems, you, the lessee, simply make the lease payment and deduct it as a business expense.

4.      Leasing Helps Conserve Your Operating Capital.

Leasing keeps your lines of credit open. You don’t tie up your cash in equity. Also, you avoid costly down payments. With other advantages such as off-balance sheet financing, leasing helps you better manage your balance sheet.

Although leasing does provide benefits to business owners, there are hidden costs to deal with, and business owners need to be aware of such costs.

Hidden Costs of Leasing

1.      Non-Cancellable Agreement

When entering into a lease contract, the business owner agrees to make all the lease payments to the end of the term. While there is no penalty for early payoff, the full payments are normally required to pay off the lease early.

2.      Document Fees

These fees are administrative costs due upon signing the lease and range from to as much as 0 or more, depending upon the complexity of the lease contract and size of the transaction.

3.      UCC-1 Fees

These are fees required by the Secretary of the State where the equipment is being leased. The fee is usually is a one-time percentage that is due upon signing the lease documents.

4.      Taxes

In most states, there is a tax on goods purchased. Some states tax at 5 or 6%, or more. The tax is factored into the lease payments, so be prepared to calculate this cost, as it could increase your monthly lease payments or more per month depending upon the total cost of the equipment, and the state of purchase.

5.      Insurance

A section in the lease documentation will require that the equipment be covered by insurance. Here the leasing company is protecting their interests. They want to make sure they will be fully compensated for the equipment in the event of fire, theft, flood, etc. Most business owners will already have adequate insurance on their building to cover such equipment (if it is contained and used inside). However other companies using more portable equipment (such as lift trucks, golf carts, hydraulic lifts, bulldozers, etc.) may need to take out additional insurance to assure adequate coverage.

The bottom line is that when you are deciding to lease equipment, be certain you are aware of all costs involved with the transaction. Then balance them against the benefits to choose the appropriate choice for you and your business.

Albert Lindenberg

Canyon Leasing

Al.Lindenberg@CanyonLeasing.com

For lease


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More business sorrow from Main Street… quite literally Main St., Mesa, Arizona. Eximus Wide & Slim with Kodak Tri-X 400.

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NEW BUSINESS LICENSES: Week of August 23, 2010
NEW BUSINESS LICENSES: Week of August 23, 2010
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Instant Business Loans – Loans for Every Business Need

Instant business loans cater to small and big business both. We all know that business involved money transactions daily. If you fall short of cash at any time, you can suffer huge losses. To avoid such losses, the online financial institutions are offering business loans.

Business loans can also be secured loans or unsecured loans. Secured loans require the person applying for the loan to place any kind of property or any other valuable object as collateral. On the other hand, if the business man has nothing to place as collateral, he too can apply for loans: unsecured loans.

You cannot afford delays in taking business decisions. And furthermore, you cannot delay the implementation of those decisions because each second means more profit. Delay can lead to unwarranted loss. You may need loan to buy raw material, to hire vehicles to deliver goods on time. Whatever be the reason, you can approach one of the online financial institutions to apply for the instant business loans.

Business loans are not only for existing businesses. If you have a plan for a new business and are looking for funds to implement the plan, you may find it hard to fund your project. As you are a newcomer to the world of business, you may face lots of problems in getting the loan sanctioned at your local banks. But there is an easy way out. You can take the loan from the online money lenders.

As with other online loans, you can apply for the instant business loans even if you have a bad credit score. The thing is you get the loan much faster and easily than the local banks, as there are fewer formalities to be followed. You can also make use of these loans to get your credit score back on the track. As you pay your monthly installments on time, your score improves. This makes way for your future needs.

Oriented.com Happy Hour – 06/25/08 @ the Lava Lounge, SF


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Oriented Happy Hour in San Francisco Bay Area was held on Thursday, June 26 at Lava Lounge. The featured guests is Wokai, a capital-contributing microfinance intermediary in the China microfinance field

ORIENTED is a global network of international professionals interested in Asian business and partnerships, with more than 30,000 members worldwide. Our signature service, the ORIENTED Happy Hours, are "simultaneously" held on the last Thursday of every month in more than ten cities around the world, providing international networking opportunities and global guanxi for our members.

Wokai is a capital-contributing microfinance intermediary in the China microfinance field. Wokai is specifically committed to raising loan capital for microfinance institutions (MFIs) in China. Our organization achieves this goal through creating an internet platform that empowers individual contributors to provide Chinese microentrepreneurs with loan capital. To facilitate this capital transfer, Wokai partners with local MFIs that are responsible for both dispersing capital and monitoring microentrepreneurs. Through utilizing the power of the internet, Wokai reaches out to individual contributors, a funding source generally inaccessible on the large scale to non-profit organizations operating in China. This unique approach allows Wokai to provide new capital resources to the microfinance sector, thereby expanding financial opportunities for the poor in China.

Appeal from victim of the Brookes Business School saga
I am Edwin, a local born citizen, and am now in my twenties. I acquired a CAT certificate from Singapore Accounting Academy (SAA) in 2005, and a diploma in Computer Engineering from Temasek Polytechnic in 2006. Due to the employment market condition back then, I chose to pursue a degree in Banking and Finance instead [...]
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Video from our FREE Online Business Course www.myownbusiness.org Session 8 Accounting and Cash Flow Question “Why is a good understanding of accounting important for running your own business?” Maureen Costello Wholesale Distributor Topics covered in this video: Understanding business accounting, cash flow, taxes, loans Transcript: I think that if an entrepreneur doesn’t have a good understanding of accounting there will be a very high probability of failure. Accounting is the way you keep track of how well your business is doing. It’s how you keep track of your cash. If you run out of cash, even if your sales are growing and your profits on the books are high, you’re out of business. You can go bankrupt even with a successful business. So the only way you’re going to know is if you do really good accounting, do cash flow projections and really watch your cash. So that’s number one. Secondly, you have pay taxes; you have to be in compliance with the tax laws. If you’re not very good with accounting you’re going to have problems with the IRS. They too can put you out of business. So you want to be sure you know what you’re supposed to be doing from an accounting point of view. Also, you won’t be able to get bank loans if you don’t do a good job at accounting because you have to have financial statements that you can bring to a bank that are in the format that they are accustomed to, in order to gain their confidence to loan you money. So there are a number of reasons why …