Advantages of Equipment Financing

Freeing up cash:

Your cash won't be tied up paying for large business purchases equipment.
You can use the cash to finance your Company's internal growth such as be used for mergers, acquisitions, or for general expansion

Flexibility:

You choose the length of the term based upon your Company's cash needs, long and short-term goals. Unlike most bank loans, leases can be structured with minimal amount up front and lower monthly payments, and be inclusive of soft costs.

Convenience:

Bank loans burden borrowers with tedious paperwork. With equipment financing, the decision process is hassle- free. Our one-page application, in most cases, is all that is needed; simplified documentation is straight forward, and minimizes the time you spend filling out forms.

Tax Benefits:

Payments relating to operating leases go directly to the bottom line and therefore reduce your tax burden. We always advise you to speak with your accountant prior to committing to any financial deal or investment.

 

Section 179 Tax Savings

Take advantage of available tax savings...Here’s how:

Under Section 179, businesses that spend less than $430,000 a year on qualified equipment or property can write off up to $108,000 in 2006. The rules are designed for small companies so the $108,000 deduction begins to phase out businesses that purchase more than $430,000 in one year.

Non-Tax/Capital Leases

The benefit of this lease type is that it can take advantage of Tax Code Section 179 and expense up to the amount allowed for the year the equipment is installed. Examples of this type of lease include $1.00 Buyout and 10% Purchase Upon Termination (PUT) leases.
Using Section 179 and assuming a 35% tax bracket, net savings on the equipment would be:

Example: Equipment Cost =                $125,000
1st Year Write Off:
Section 179                                         $108,000
($108,000 is maximum write-off)

Normal 1st Year Depreciation             $ 3,400
($125,000-$108,000 = $17,000 x 20% = $3,400)*

Total 1st Year Deduction                    $111,400
($108,000 + $3,400 = $111,400)

Tax Savings Assuming Rate of 35%    $ 38,990
($111,400 x .35 = $38,990)

1st Year Bottom Line Cost                  $ 86,010
($125,000 - $38,990 = $86,010)

*Depreciation calculated at 5 years