Financial Solutions for Growth….pptVIP

Financial Solutions for Growth… Equipment Financing Why Choose Financing? Benefit from Equipment Use With financing, your business need only cover the monthly payment to be profitable Businesses profit immediately from equipment use: Better, high-end equipment for minimal change in monthly payment (avg. $20 increase for every additional $1000 financed!) Lease payments are a 100% tax-deductible expense for your business! Example: Consider the productivity of new equipment and an affordable $500 Monthly Lease Payment (Usage/Rental Fee) Daily Cost of Equipment Monthly payment $500 ? by 30 days = $16.67/day! Hourly Cost of Equipment $16.67 ? by 8 workday hours = $2.36/hour! Benefit from Equipment Use Flexible financing options permit you to structure your lease in the most convenient manner for your business. Not having to come up with cash for “soft costs” means no large outlay of cash. Two Types of Leases For IRS purposes, a lease is either a: Each has different tax benefits and end of lease options Tax Savings: Non-Tax LeaseNon-Tax Leases: Attractive to companies that want the tax benefits of ownershipLessee purchases equipment upon lease termination at a pre-agreed amount: $1.00 Buyout, 10% PUT, SD=BO, or EFA (Equipment Finance Agreement)Tax Benefit: Accelerated depreciation using IRC Section 179 in year purchased and put in use and interest write-off throughout the life of the lease Tax Savings: Tax LeaseTax Leases: Attractive to companies that continually update equipmentLessee wants use of equipment without ownership and may return it at lease-end Tax lease is not considered debt and does not appear as debt on the tax return, making the lessee’s balance sheet more attractive to traditional lenders Tax Benefit: Deducting 100% of lease payments as an expense lowers a businesses taxable income Lease Versus Cash Financing Will Boost Your Business! Conclusion: What are the most important things to remember in the previous examples? Equipment f