- Equipment Leasing
Leasing is one of the most popular ways of financing equipment for companies of every size. Leasing allows you to get your equipment simply and quickly with very little down and without pinching cash flow. In addition to conserving valuable working capital and preserving bank credit lines, leasing business equipment rather than paying cash may offer tax savings if structured correctly. Operating or “true” lease payments may be fully expensed and accelerate tax deductions when compared to lengthy depreciation schedules. Conventional bank and other financing often have term restrictions and relatively higher down payment requirements than leasing. AmeriCapital offers one-hundred percent financing including soft costs, warranties, tax, freight and installation Since all equipment buyers do not have the same revenue trends and allocated expenditures for equipment, AmeriCapital meets different needs by offering flexible lease payment programs and terms. Our standard lease terms are 12 to 60 months (72 months are available for specific equipment types). We offer 90 days deferred payment programs for customers seeking to produce revenues before paying for equipment. We have seasonal and skip payment programs for businesses which have low revenue trends during certain times of the year. We also offer quarterly and annual payment plans for government and municipal customers.
- Advantages Of Leasing
Equipment leasing has several advantages over traditional bank financing. Unlike banks, equipment leasing typically requires little or no down payment, it is easier to qualify for and typically doesn’t require proof of income or tax returns. In addition, most equipment leases are not reported on personal credit reports so it won’t affect debt-to-income ratios when applying for other types of loans. Some of the other many advantages include:
- Less impact on business cash flow – You can structure payments to parallel your cash flows. Equipment leasing can be great for seasonal or cyclical businesses that prefer to schedule payments during peak cash flow periods.
- Reduced paperwork and approval time – Most lease credit decisions can be made within 24 hours. Transactions up to $75,000 require completion of only a simple, one-page application.
- Conservation of capital and credit – Your bank credit lines and sources of capital aren’t tied up in equipment. Instead, they’re available for opportunities such as inventory, marketing, or personnel.
- Immediate use of equipment – After signing your lease documents, you can contact the vendor to schedule delivery. It’s that easy.
- Project basis use of equipment – By selecting a lease term that closely matches the project’s duration, leasing is a good way to acquire the latest equipment without having to keep it when that project is complete. Then, enter another lease on new equipment for the next project. This way you’ll always be able to maintain a competitive edge by using the most advanced equipment to serve your clients.
- 100% financing – In addition to financing the equipment, you can include “soft” costs (up to 10% of the equipment cost) such as sales tax, shipping, software, training, maintenance and installation into the lease.
- Protection against obsolescence – High tech equipment is often obsolete in two-to-four years. You can add upgrades and new equipment by modifying your lease arrangement to keep your company on the leading edge. Plus, if you want to acquire complementary equipment (e.g., adding voice mail to a phone system), you can arrange for both equipment leases to end at the same time. This can prevent staggered leases from making your equipment a confusing combination of new and old.
- Tax benefits – For certain leases, you can deduct monthly lease payments as an operating expense. Moreover, leasing may help your business avoid the Alternative Minimum Tax (AMT).
- Improved balance sheet ratios – Unlike the traditional methods of financing, operating lease obligations generally are not capitalized, improving balance sheet ratios.
- Options for purchase or renewal – At the end of the lease you may choose to purchase your equipment, upgrade it, or continue to lease it. Or, if you’re done with the equipment, return it.
- Reduced interest rate risk – By locking in fixed payments now, you can avoid the risk of inflation in the future.
- Equipment We Finance
We provide lease financing on most types of equipment both new and used up to 72 month terms. Most approvals require little or no down and a one time $250.00 documentation fee. Below is a partial list of industries and equipment types we have prefer. If your equipment isn’t on the list give us a call to see if we can approve it.
- Construction Equipment
- Medical & Dental Equipment
- Carpet Cleaning Equipment
- Security, Video Surveillance Equipment
- Automotive Equipment
- Drycleaning and Laundry Equipment
- Health & Fitness Equipment
- Salon & Tanning Equipment
- Trucks & Trailers
- Software Only Leases
- Computer Hardware, Servers
- Office Furniture & Equipment
- Material Handling Equipment
- Portable Buildings & Containers
- Commercial Printing Equipment
- Restaurant Equipment
- Playground Equipment
- Beer & Wine making Equipment
- Audio & Visual Equipment
- Amusement & Vending Equipment
- Barcoding Equipment
- Surveying Equipment
- Veterinary Equipment
- Municipal Leasing
The biggest obstacle faced by government agencies in acquiring needed equipment is meeting their fiscal year budgetary requirements. Often, there is just not enough money budgeted to purchase essential equipment outright. AmeriCapital can help you overcome budgetary constraints by financing the equipment you need today.Anything essential to the operation of the Agency or Department can be financed on a municipal lease. Some specific types of equipment are:
- Mobile Systems, Telephones, E-911 Systems
- Micro to Mainframe, Hardware, Software, Networks & Peripherals
- Office Equipment, Fax Machines, Copiers, Furniture
- Simulators for: Firearms, Driving, Flight, Etc.
The term of a lease is generally one to five years depending on the useful life of the equipment and the needs of the government agency. In addition there is no down payment required and credit approval is guaranteed.
QUICK DELIVERY: Lease Purchase financing allows the Government Entity to get the equipment they need immediately without waiting for voter approval through a bond issue. This means increased productivity for the Government Entity, and a FAST cash sale for the vendor.
NON-APPROPRIATION: In most jurisdictions, the authority of the administrator to enter into debt or obligation of future funds is severely limited. For this reason, Municipal leases are characterized by a Non-Appropriation clause which specifies that the lease may be terminated in the event funds are not made available in subsequent fiscal years. Title to the equipment usually resides with the lessee so that the government agency’s sales and property tax exemptions apply.
$1.00 BUYOUT: Lessee owns the equipment at end of lease term.
FLEXIBLE TERMS: The payment type can be tailored to suit the needs of each government. Annual, semi-annual, quarterly and monthly payment intervals are available with terms extending to the useful life of the equipment. Deferrals, down-payments and advanced payments can also be arranged for the Municipality’s benefit. Terms reflective of the useful life of the equipment will have a lower interest expense compared to long term bond issues. Lessees can choose repayment schedules most attractive to their needs, including length of contract, payment interval, and advance or arrears payments. Up to 100% of equipment cost can be financed, and training and maintenance can also be included. Municipal Lease Purchase is an ownership plan, not a rental. After completing the payments the lessee owns the equipment, there is no balloon or residual payment at completion.
NOTHING DOWN: Under most payment plans, no down payment or security deposit is required. However, structuring the lease with advance payments may lower the net cost of financing to the lessee. Often we can also defer the 1st payment up to one (1) year, however a down payment is required with this optionA municipal lease rental contract may in many instances be more appropriate than a municipal lease purchase. When a decision is being made between a rental or purchase contract, it is essential that the administrator have a clear understanding of the differences between the two alternatives.
Municipal Lease Rentals
Often a governmental entity is constrained by local legislation from entering into lease purchase contracts without bidding or voter referenda. In some instances the equipment may have a limited life-span, therefore there is no desire to own the equipment after a fixed period. In still other situations, rapidly changing technology may lead to the conclusion that long term ownership is not an attractive outcome. In these situations, a municipal
LEASE RENTAL may be the appropriate financing answer. A municipal lease rental is NOT A MONTH TO MONTH CONTRACT. Municipal rental is a fixed length financing in which the equipment will be paid for by the leasing company, and will revert to the leasing company at the completion of the contract term. Additionally, with municipal lease rental the interest paid by the lessee is not tax exempt to the investor. The result of this is that a rental will often have higher payments than a municipal lease purchase due to the higher interest rates.
NON-APPROPRIATION CLAUSE: A Municipal Rental does possess the same non-appropriation provisions as a municipal lease purchase. In most jurisdictions, an administrator may not enter into a contract which obligates funds beyond the current fiscal year. With few exceptions, the courts have held that a non-appropriation clause which allows for termination of the contract should funds not be appropriated in subsequent fiscal years would be a legal means to avoid an unauthorized assumption of debt. A validated non-appropriation is the only cause for premature termination of either a municipal lease purchase or municipal lease rental.
The municipal rental also provides some options to the lessee; at the completion of the original lease contract, the lease may be extended in one year increments at the same terms and conditions of payment as the original contract. If the option to extend is not exercised, the leased equipment must be surrendered to the lessor or lessor’s designated agent. In the event that the lessee should determine that ownership of the equipment would be advantageous, a municipal rental can be bought out at fair market value (FMV), not less than 10% of original equipment cost.
When appropriate, a municipal lease rental may serve the needs of the lessee. Payments may be slightly higher than for a lease purchase, however, documentation requirements are usually less and a variety of options are available to the agency throughout the term of the lease. Give us a call for further information on a particular situation or for comparison of purchase and rental alternatives.
- Tribal Leasing
AmeriCapital offers equipment financing solutions to Native American Tribes purchasing new or used essential use equipment for the Tribe. Some of the equipment we’ve financed include: Laundry equipment, gaming equipment, buses, street sweepers, firetrucks, ambulances, medical equipment and portable buildings. The Tribe or Tribal Enterprise will be required to provide tribal financial statements and agree to sign a limited waiver of sovereign immunity to review for final approval. We finance equipment purchases from $5,000 on up to $10 million. Terms can be structured from 12-60 months on either an equipment lease agreement or equipment finance agreement (EFA). Apply online or call us toll free at 1-877-678-0061 to discuss your particular equipment needs.
- Federal Leasing
What is a Federal Lease?
A Federal Lease is an alternative to an outright purchase. It allows Federal Agencies to obtain necessary equipment and other assets while still operating within their budget. The type of property that can be financed with a Federal Lease includes computers, software, office equipment, communications equipment, security systems, furniture, and vehicles. We also arrange financing for other types of property.
The term of a Federal Lease is typically one to three years with longer terms available, depending upon the type of equipment and the needs of the Federal Agency. During the term of the lease, the Government Agency makes scheduled payments. Our underwriter provides flexible re-payment terms that meet the financial needs of the Federal Agency.
Overcome Budgetary Constraints
The most significant challenge faced by Governmental Agencies when acquiring needed property is their fiscal year budgetary requirements. Often, insufficient funds are budgeted for the outright purchase of essential property. We overcome this budgetary constraint by financing the property. We hold GSA contracts for lease financing, so we can team with the GSA vendor of choice to provide leasing services. We can also finance property obtained with open market pricing, terms and conditions.
When the cost of equipment is viewed as a series of monthly payments, the budgetary process is more efficient in managing an acquisition. Leasing presents the opportunity to spread the acquisition over multiple budgetary periods, which is more likely to correspond with the useful life of the equipment. Our low rates permit the agency to increase their purchasing power. For example, without leasing, budgetary limitations may force an Agency to settle for equipment that is less than adequate for its long-term needs.
Who uses a Federal Lease?
Most agencies of the executive (such as the Departments of Agriculture, Commerce, Defense, Education, Energy, Health and Human Services, Interior, Justice, Labor, State, Department of Transportation, Treasury and Veterans Affairs), legislative (such as the Senate, House of Representatives, Library of Congress, General Accounting Office, Government Printing Office), judicial (such as the Supreme Court and other Federal Courts) branches of the Federal Government use leasing to acquire property and other assets, as well as several semi-independent agencies (such as EPA, FEMA, GSA, NASA, SEC, SBA, SSA, TVA, and USPS). In addition, some contractors and subcontractors to the Federal Government use Federal leasing to acquire property needed to fulfill their contracts.
Lease To Ownership (LTOP): With an LTOP, the Federal Agency makes regular payments for the term of the lease. At the end of the lease term, the agency owns the property.
Lease With Option to Purchase (LWOP): Under an LWOP, the agency makes regular payments for the term of the lease and has the option to purchase the property at the end of the lease term for a specified amount. If the agency chooses not to exercise its option to purchase, the property can be returned to the leasing company or the lease can continue for an additional term(s).
Straight Lease or Rental: With a straight lease or rental, the agency makes regular payments for the term of the lease. At the end of the lease term the agency either renews the lease for an additional term or returns the property to the leasing company.