Leasing vs Financing... Know the Facts !
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1100 Win Drive
Bethlehem, PA 18017
1100 Win Drive
Bethlehem, PA 18017
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Why lease?
Affordable payments...potential decreased tax liabilities...preservation of band lines of credit...easy add-ons and upgrades...and improved cash
flow. Thanks to benefits like these, eight out of ten U.S businesses use lease financing to acquire the capital equipment required for growth. For
more details, refer to the section titled Benefits Of Leasing & Financing.
What is a lease?
A lease is a contract where one party ("Lessor") allows another ("Lessee") the exclusive right to use and possess its equipment for a specific
period of time. The contract obligates the Lessee to make periodic payments, or rentals, to the Lessor for the use of the equipment. A lease
utilized as a source of financing is usually a long-term agreement that is non-cancelable. The Lessee is responsible for all peripheral costs
associated with the use and maintenance of the equipment, including such things as taxes and insurance, during the term of the lease. At the
end of the lease term, the Lessee may have the option to purchase the equipment based upon a predetermined purchase option which can be
as little as $1.00.
What type of Equipment does East Penn Financial Provide funding for?
Any new or used equipment or accessory acquired for business use.
When my lease ends what are my options?
At the end of your lease term, you have the option to purchase the equipment according to the original provisions chosen at the beginning of the
lease term or if a commercial loan you will own the truck clear of any leins upon making your final payment. For more details, see the section
titled Purchase Options.
Are my payments fixed?
Yes, all Commercial finance and Lease payments or purchase options will be fixed rates.
Is a down payment required?
Most standard programs require the first and last payments in advance. Special programs requiring no down payment are available to qualified
applicants.
Can the lease be cancelled?
No. But you can trade-in or upgrade the equipment for new leased equipment before the initial term expires or select our easy buyout program.
Let your equipment pay for itself
Leasing provides you with the use of equipment for an agreed upon payment. You pay for equipment as it is being used to generate revenue
rather than cash upfront. This helps maximize the matching of income to investment.
Tax Advantages
Lease payments may be fully deductible as a business expense. Leasing can also help you avoid Alternative Minimum Tax (AMT) liability.
Minimize Balance Sheet Liabilities
Lease payments may be eligible for "off-balance sheet" treatment, where items are treated as expenses rather than Assets and Liabilities,
improving financial ratios.
Preserve Lines of Credit
Leasing will not tie up valuable lines of credit you may need for expenses or to fuel growth and expansion.
Flexible Payment Options
Leasing allows you to design payment structures to meet budgetary requirements or seasonal cash flows. Lease terms can range from 12 to 60
months with flexible renewal options.
Lease Line of Credit
If you regularly use lease financing to purchase equipment, we can approve your company for a lease line of credit that allows you to purchase
equipment in the future without the needs of applying for credit for each individual purchase. This allows use to do quick delivery's of trucks in
less than a day.
Step-up Payments
Step-up payments start out low and increase after a certain period of time. These payment structures are ideal for growing or expanding
businesses that anticipate increased revenues at a later period of time.
Deferred Payments
Deferred payments allow you a 30,60,90 day deferment of the first monthly payment.
No money down lease
Real 100% financing. Some customers may qualify for a zero down lease. This lease requires no advance payments. Your first lease payment
will be due 30 days from the day your lease starts.
Affordable payments...potential decreased tax liabilities...preservation of band lines of credit...easy add-ons and upgrades...and improved cash
flow. Thanks to benefits like these, eight out of ten U.S businesses use lease financing to acquire the capital equipment required for growth. For
more details, refer to the section titled Benefits Of Leasing & Financing.
What is a lease?
A lease is a contract where one party ("Lessor") allows another ("Lessee") the exclusive right to use and possess its equipment for a specific
period of time. The contract obligates the Lessee to make periodic payments, or rentals, to the Lessor for the use of the equipment. A lease
utilized as a source of financing is usually a long-term agreement that is non-cancelable. The Lessee is responsible for all peripheral costs
associated with the use and maintenance of the equipment, including such things as taxes and insurance, during the term of the lease. At the
end of the lease term, the Lessee may have the option to purchase the equipment based upon a predetermined purchase option which can be
as little as $1.00.
What type of Equipment does East Penn Financial Provide funding for?
Any new or used equipment or accessory acquired for business use.
When my lease ends what are my options?
At the end of your lease term, you have the option to purchase the equipment according to the original provisions chosen at the beginning of the
lease term or if a commercial loan you will own the truck clear of any leins upon making your final payment. For more details, see the section
titled Purchase Options.
Are my payments fixed?
Yes, all Commercial finance and Lease payments or purchase options will be fixed rates.
Is a down payment required?
Most standard programs require the first and last payments in advance. Special programs requiring no down payment are available to qualified
applicants.
Can the lease be cancelled?
No. But you can trade-in or upgrade the equipment for new leased equipment before the initial term expires or select our easy buyout program.
Let your equipment pay for itself
Leasing provides you with the use of equipment for an agreed upon payment. You pay for equipment as it is being used to generate revenue
rather than cash upfront. This helps maximize the matching of income to investment.
Tax Advantages
Lease payments may be fully deductible as a business expense. Leasing can also help you avoid Alternative Minimum Tax (AMT) liability.
Minimize Balance Sheet Liabilities
Lease payments may be eligible for "off-balance sheet" treatment, where items are treated as expenses rather than Assets and Liabilities,
improving financial ratios.
Preserve Lines of Credit
Leasing will not tie up valuable lines of credit you may need for expenses or to fuel growth and expansion.
Flexible Payment Options
Leasing allows you to design payment structures to meet budgetary requirements or seasonal cash flows. Lease terms can range from 12 to 60
months with flexible renewal options.
Lease Line of Credit
If you regularly use lease financing to purchase equipment, we can approve your company for a lease line of credit that allows you to purchase
equipment in the future without the needs of applying for credit for each individual purchase. This allows use to do quick delivery's of trucks in
less than a day.
Step-up Payments
Step-up payments start out low and increase after a certain period of time. These payment structures are ideal for growing or expanding
businesses that anticipate increased revenues at a later period of time.
Deferred Payments
Deferred payments allow you a 30,60,90 day deferment of the first monthly payment.
No money down lease
Real 100% financing. Some customers may qualify for a zero down lease. This lease requires no advance payments. Your first lease payment
will be due 30 days from the day your lease starts.
Benefits of Leasing & Financing
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Loans usually require the end user to invest a
down payment in the equipment. The loan
finances the remaining account balance.
Loans often require the borrower to pledge other
assets as collateral pending credit backgrounds
and past payment history.
The end user bears all the risk of equipment
devaluation because of new technology.
End users may claim tax deduction for a portion of
the loan payment as interest and for
depreciation,which is tired to IRS Depreciation
schedules.
Financial Accounting Standards require owned
equipment to appear as an asset with a
corresponding liability on the balance sheet.
A larger portion of the financial obligation is paid
in today's more expensive dollars.
Leases require no down payment and finances
only the value of the equipment expected to
deplete during the term of the lease. The Lessee
usually has the option to purchase the equipment
at the end of the lease for its remaining value.
The leased equipment itself is usually all that is
needed as collateral.
The end user transfers the all risk obsolescence
to purchase the equipment at the end of the lease.
Leases can be structured so that the end user
may claim the entire lease payment as a tax
deduction. The equipment write-off is tied to the
lease term, which can be shorter than IRS
depreciation schedules, resulting in large tax
deductions each year. The deduction is also the
same every year, which simplifies budgeting.
Leased assets are expensed when the lease is
an operating lease. Such assets do not appear on
the balance sheet, which can improve financial
ratios.
More of the cash flow, especially the option to
purchase the equipment, occurs later in the lease
term when inflation makes dollars cheaper.
vs.
LOAN
LEASE