At MaxPro, we strive to provide our clients with the lease terms they desire to obtain the equipment they need. In this modern age of business, it is more important than ever to make smart financial decisions. Leasing provides fast, easy, and flexible terms to get your company the equipment it needs to stay on the leading edge of your industry.
What is Leasing?
A lease is a contract between a Lessor (the entity conveying the asset) and the Lessee (the entity receiving the asset). In this document, terms such as length of lease and payment arrangement are specified.
In equipment financing, there are two main forms of leases, including:
1. Operating Lease: Lessor books and depreciates the equipment as an asset and Lessee makes lease payments (as operating costs). This is typically used for equipment that quickly becomes obsolete and usually contains an option
to purchase at the end of the lease. This is generally a tax friendly option.*
2. Capital Lease: The asset assignment is considered a sale and title is given to Lessee at the end of the lease. The length of the lease must be at least 75% of the economic life of the equipment, and the present value of the lease payments must be at least 90% of the value of the equipment at transfer. This lease is typically used when the Lessee plans on owning the equipment in the long-term.*
Benefits of Leasing
- Convenience: Unlike a typical bank loan, MaxPro’s application is one page and there is usually no need to produce further documentation Generally, applications are approved within 24 hours. A lease is a non-conflicting source of credit, and won’t interrupt your ability to borrow in the future.
- Flexibility: Lease terms are flexible and payments are low. Payments can be made seasonally, and can even be deferred.
- Staying Modern: With leasing, you won’t be stuck with equipment that goes out of date. You can easily upgrade or replace obsolete equipment, giving you a competitive edge.
- Improved Cash Flow: Save your cash flow and working capital by choosing an equipment lease. With a lease, you can make low monthly payments and save your money for other expenses such as payroll, improvements, or marketing.
- Tax Benefits: Often, lease payments can be deducted from your taxable income as operating expenses. Additionally, the proper use of your equipment will generate enough profits to exceed these monthly payments,anyway. When you use a bank loan or cash payment, you only end up losing money in the long term on depreciation.*
- Finance Intangibles: Not only can you finance equipment, you can also finance soft costs such as software, service, installation, or shipping. With a lease, one low monthly payment can cover everything.
- Increased Buying Power: If you don’t have the cash flow to purchase the equipment you need to succeed, a lease can help. Now you can quickly and easily get the tools you need to run a profitable business.
- 100% Financing: Unlike banks, that require a 20% down payment, a lease can finance 100% of the equipment. This flexible option reduces upfront costs so you can save cash flow. We also offer specialty programs to meet the unique needs of each business.
For more information on how MaxPro Leasing can help your business, please contact us today.
*Always consult with a licensed CPA for tax advice and tax laws in your state