Christian Equipment Lease Financing
Entrepreneurs may opt for Christian equipment lease financing rather than investing cash in machinery that may become obsolete over time or increase overhead expenses. Technology, especially in electronics, changes so rapidly that corporations often prefer leasing computers, laser printers, copiers, and even telecommunications systems rather than buying. Business owners reason that money spent upgrading or purchasing new equipment to keep pace with technological advances every few years could be better utilized by entering into either a "true" or a "finance" lease agreement. Another consideration for leasing over buying is simply to keep down overhead. Many companies, especially startups, cannot afford to furnish offices full of computer systems, desks and chairs, and file cabinets without breaking the bank. Long term rentals level the playing field between large corporate moguls with limitless funds versus small businesses with limited operating capital.
When businesses need machinery, computers, or copiers but lack the cash, they often opt for a true lease agreement which is similar to renting a piece of machinery or furnishings for an extended period of time with the intention of exchanging, or upgrading items at the end of the term or when newer models become available. Lessees have the advantage of having access to state-of-the-art tools and accessories without paying top dollar. True equipment lease financing may be more popular because monthly installments tend to be lower than a finance agreement, which works similar to buying on an installment plan. Companies which offer business accessories on a true lease can make more revenue by renting items again and again to various individuals and businesses. For example, a company leases a copier to a small firm for one year, at the end of which the lessee decides to upgrade to a pricier model with more features. The copier company has the option of leasing the older unit to another business owner, and another, until the original wholesale price of the copier has doubled or even tripled, especially when financing fees are added.
Certain types of long term equipment lease financing allows business owners to eventually own the machinery, computer, or copier at the end of the agreement or simply terminate the agreement and rent another piece of equipment. Finance leasing offers business owners an installment plan which works similar to buying an automobile or other big ticket item. All monthly payments go towards the purchase of the item; and lessees only need to make a buyout payment to transfer ownership, unless they decide to rent another piece of equipment under a separate agreement. Living every day life is like making payments on an installment plan. The reward for righteous living as a child of God is eternal life. "For God so loved the world, that He gave His only begotten Son, that whosoever believeth in Him should not perish, but have everlasting life" (John 3:16).
Unlike eternal life in Christ, copiers, telecommunications equipment, faxes, computers, and printers on long-term equipment lease financing are not expected to last a lifetime and usually require maintenance. Since rental agents retain ownership of all items, providing regular maintenance ensures that their investment is protected from user neglect or disrepair. Business owners who purchase machinery and supplies without leasing bear the burden of paying for maintenance and repair, usually covered under a separate agreement and subject to additional fees.
Flexible equipment lease financing can vary according to a business' cash flow or longevity. Rental companies realize that a startup business may need time to realize a profit and make monthly payments, therefore some contracts start out with low payments which gradually increase over a period of time. Called a step lease, this kind of financing is more flexible than being locked into a rigid installment contract. As the business profits, lessees are more able to handle increased overhead expenses, including rentals. Some flexible plans might also offer lessees an opportunity to rent for one to three months without a payment in order to ease the financial burden of starting a new enterprise. Not uncommon are contracts which allow renters to keep merchandise for up to one year without making a payment; however when installment plans kick in, they can include some hidden fees and interest rates.
Long-term equipment lease financing also has its advantages at tax time. The value of purchased machinery and computers must be depreciated each year; however rental payments are 100% tax-deductible if utilized solely for business purposes. Owners can realize a tax break by deducting monthly payments, maintenance fees, and supplies as part of overhead expense. However, state and federal revenue departments may view rental payments as installments towards a purchase and require that equipment be depreciated, rather than deducted at 100% of its value. Entrepreneurs considering long term leasing may want to consult with tax professionals or certified public accountants to determine which type of agreement offers the best deduction.
Dealers or manufacturers of office furnishings or machinery usually have an in-house department or an independent agency which specializes in equipment lease financing. The independent agency or onsite department buys the item and loans it back to the customer for a specific monthly installment deducted from the purchase price at the end of the term, or a monthly rental without expectation of a buyout. Individuals and corporations who opt for lease financing will need to have good to excellent credit and submit banking information to rental companies. Consumers can find leasing firms online or in the local business directory; however most local dealers and suppliers will refer customers to a preferred agent. Before signing on the dotted line of short- or long-term contracts for equipment lease financing, entrepreneurs should read the fine print, especially when it comes to terminating the agreement before the end of the contract, maintenance and repairs, consumables, and buyouts.
Christian Equipment Leasing CompaniesUtilizing the services of equipment leasing companies to help offset expenses and increase cash flow can be a wise move for any business. At the beginning of any venture, it can be difficult to attain the funds to purchase the basic and fundamental items that are needed to get a business off the ground. This challenge could prevent many aspiring entrepreneurs from moving forward. Without office furnishings, production machinery, or any of a number of necessary items, many successful companies could not survive. The option to lease these items can transform a start up business from a good idea to a functioning and profitable reality. The way that equipment leasing companies work is simple. A business owner will rent various pieces of equipment from a provider rather than making an outright purchase. The cost of buying many of these items can be prohibitively high. Significant savings can result when a company rents what it need for a specified length of time. After the lease has ended, the business will usually have the option to purchase the equipment, often at an attractive price. Or, they may negotiate a new lease of the same apparatus, return it, or lease brand new items. Since the money that is needed to carry out the lease will not show up as debt, leasing can be a better option for a businesses' bottom line.
There are a variety of different types of equipment leasing companies that a business can choose from. When selecting a lease company, careful comparison shopping in areas such as rates, fees, terms, and the kinds of equipment that an organization offers. Very few, if any, of these organizations will have everything on hand that every business needs. In fact, a company might choose to specialize in one or just a handful of industries. For example, there are organizations that offer business furniture, but do not offer production machinery of any kind. There are special items that are needed for businesses that cater to the food industry. Attaining tools and apparatus that are specific to this industry is very important. In addition, there are many different types of leases. A lease may be used to simply supply the items that are needed for the operation of the business for a specified length of time. However, some organizations may include the option of eventual ownership of the equipment, with a portion of lease payments going toward the purchase price. The size of the order is an additional specialization. Many organizations may specialize in smaller orders, while others deal only in very large leases. Whatever a client's needs might be, there are generally equipment leasing companies that can fill the bill.
Reasons for going with equipment leasing companies can vary, but the benefits can be multiple. Cash flow can be greatly preserved when choosing to lease. Machinery, computers, and other items that may be needed for smooth business function can change at a rapid pace. Obsolescence can happen quickly, turning large scale investments into losses at an alarming speed. Whether an entrepreneur wishes to utilize new equipment or used, industrial or technological, leasing these needed items means that a company can update technology on a regular basis. Often there will be other features that are included in a lease. These features could include service contracts, regular maintenance, training, installation, or software. With a lease, there is no money that is tied up in a hefty down payment. Available credit will not be impacted when leasing is the option that is chosen. In most cases, collateral is not required. In addition, there may be certain tax advantages that apply. Of course, whenever a business owner approaches equipment leasing companies they should take into account just how much money they can afford to spend on a monthly lease payment. It would be very easy to over commit since the items are not being purchased. A wise organization will avoid this temptation.
When signing an agreement with Christian equipment leasing companies, there are generally certain fees attached. These fees may include documentation fees, site inspection fees, commitment fees, and lien search fees. The documentation fee will include the cost of applying for the lease. Such expenses as credit checks, the processing of documents, or postage costs are covered in this fee. A site inspection fee may not always apply to every lease. A vendor will sometimes want to see the location and ease of access that is associated with of a lessee's facility. If a lease is especially large and complicated, a commitment fee may be charged. Insurance is another cost that is associated with these leases. Anyone who is staring a new business understands the need for practical solutions and constructive help. The Bible instructs believers to help out the poor. "He that giveth unto the poor shall not lack: but he that hideth his eyes shall have many a curse." (Proverbs 28:27)
There is a wide variety of office and computer equipment that can be provided by equipment leasing companies. Office furnishings and cubicle dividers can frequently be obtained by lease. In addition, telephone and other communications systems are widely available. In the area of computer technology, hardware and software, back-up systems, copiers, and servers can be leased. Whether the need is for traditional desktop PCs or laptop models, most of these companies can provide the needed items. Printers and monitors and even workstations can be leased rather than purchased outright.