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In 2007, BestLoanMaker.com has decided to extend its services level to cover equipment financing and leasing mainly service the small to medium size business owners. We have partnered with some of the most reputable experts in the industry who will enable us to bring their 20 years of experiences into our team.
THE BASICS OF LEASING
Leasing equipment through BestLoanMaker.com will give you the means to help your business grow. We work with our clients to learn about their business so that we can provide the best equipment solution. Did you know that leasing is one of the fastest growing and most popular ways of financing equipment in business today? Recent statistics show that almost 78% of equipment sold to businesses is financed in some way, and of that total, at least 50% is leased. Leasing can help your company's financial picture by matching the terms of the lease with the useful life of the equipment. Envision Leasing offers a wide variety of leasing and financing programs to lessees interested in leasing equipment and can tailor leases to meet each lessee's industry needs and requirements. Best of all, leasing saves you money! Leasing requires less in capital dollars then other methods of financing.
WHY LEASE?
Leasing is often smarter than buying. Some of the advantages for businesses to lease equipment include:
• Get the latest in equipment technology with affordable monthly payments. Lease payments are often lower than payments available through conventional financing. Make the latest equipment and technology affordable for your growing business.
• 100% Financing - Consolidate multiple costs in one convenient payment. Equipment, installation and soft costs can be put into one affordable monthly payment
• Fixed Payments - Lease payments are fixed no matter what the market does tomorrow.
• Tax Benefits - You can enjoy certain tax benefits inherent only to leasing. Advantages may include off-balance sheet financing and tax deductions for lease payments.
• Conserves Working Capital - Leasing has real cash flow advantages by eliminating the large down payments or cash outlays necessary with other forms of financing or purchase.
• Preserves Existing Credit Lines - Leasing does not tie up other funds that may be available allowing your company to take advantage of additional business opportunities whenever they arise.
• Easy & Convenient - A dedicated team of finance professionals who provide you with the highest customer service.
Operating/True Lease Tax Benefits
This is the type of lease where the lessor (us) retains ownership and the lessee (you) are allowed to claim the entire monthly payment of the lease as an operating expense. The 10% Option and Fair Market Value (FMV) leases qualify for this tax deduction.
Example: Monthly lease payment is $500.00. Lease Term is 48 months. Assuming a 35% tax bracket, your monthly tax savings would be $500.00 x 0.35 = $175.00. Total tax savings over the term of the lease contract would be $8,400.00.
Capital Lease Tax Benefits
The benefit of this lease is that you can take advantage of Tax Code Section 179 and expense up to the amount allowed for the year the equipment is installed. Under Section 179, businesses that spend less than $450,000 a year on qualified equipment or property can write off up to $112,000 in 2007. For every dollar spent over $450,000, the maximum deduction is decreased by that amount. For example, if you spend $460,000, the maximum deduction is $112,000 - $10,000 = $102,000. The rules are designed for small to medium sized companies. You may depreciate any excess of the maximum amount allowed for the year. The $1.00 Buyout and 10% Purchase Upon Termination (PUT) leases qualify for this tax deduction.
Equipment Cost = $125,000
1st year write-off: $112,000 => ($112,000 is maximum write-off)
1st year depreciation $2,600 => ($125,000 - $112,000 = $13,000 x 20% = $2,600)*
Total 1st year deduction $114,600 => ($112,000 + $2,600)
Tax savings assuming 35% bracket $40,110 => ($114,600 x 0.35)
* depreciation calculated over 5 years
Please contact your tax advisor for specific information regarding IRS Section 179, and all accounting procedures.
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