April’s Business Essentials Program partner is First Financial Corporate Services, an equipment financing organization with exceptional lease rates to help AZTC members get the best leasing rates and flexibility on IT equipment, manufacturing equipment, material handling equipment, and medical equipment. This post is written by First Financial Corporate Services’ Senior Vice President of Business Development, Todd Bankofier.
As this is the third week of our blog series regarding equipment leasing, I wanted to give you the Top Ten reasons why someone makes a decision to lease equipment versus purchasing. I get asked this question a lot, so here is my answer in writing.
1. Lower cost method for acquiring assets. The residual value a lessor takes in the equipment during an operating lease can make leasing a low cost alternative to buying equipment.
2. Purchasing Power. Equipment lease financing allows the lessee to acquire more and/or higher-end equipment.
3. Balance Sheet Management. Certain types of leases help the lessee better manage the balance sheet and improve the overall financial picture, by conserving operating capital and freeing up working capital and bank credit lines for inventory, expansion and emergencies.
4. 100 Percent Financing. With equipment leasing, there is no down payment. The term of the lease can be matched with the useful life of the equipment.
5. Asset Management. A lease provides the use of equipment for specific periods of time at fixed payments. It assumes and manages the risks of equipment ownership. At the end of the lease, the lessor disposes of the equipment.
6. Service Additions. Many lessees choose to structure their leases to include installation, maintenance and other services, if needed.
7. Tax Treatment. Leasing offers the option of deducting 100 percent of the lease payment as a business expense.
8. Upgraded Technology. Leasing provides companies with the ability to keep pace with technology. The lessee can upgrade or add equipment to meet ever-changing needs.
9. Specialized Assistance. Lessors are specialists in equipment leasing and financing, and understand capital equipment markets.
10. Flexibility. There are a variety of leasing products available, allowing the lessee to customize a program to address needs and requirements – cash flow, budget, transaction structure, cyclical fluctuations, etc.
First Financial Corporate Leasing works with a wide range of companies to structure leases that make sense for each circumstance. We take true risk in the lease through residual value and this makes leasing with First Financial a very viable and cost efficient method of obtaining much needed technology.