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Banks usually secure their loans by requiring additional collateral such as real estate, equipment, inventory, receivables or your house. In fact, it is common practice for banks to file a blanket lien against all current and future assets of your company.
In most instances, the only collateral is the equipment being leased.
Bank loans often require the borrower maintain certain minimum financial ratios and report them to the bank on a quarterly or semi-annual basis. If the borrower fails to maintain those ratios the bank can call the loan. They can also place restrictions on or limit future borrowings from any institution.
Generally, there are no such restrictive covenants.
Banks are slow credit decision makers. It can take weeks to prepare your request and bring it to the credit committee for review.
Most of our approvals are issued the same or next day.
Regardless of the amount requested, most banks will not begin to review your credit until you supply a full financial package.
Our business is convenient. We are service oriented. We offer lease programs up to $150,000 without financials. Odds are we can approve your equipment lease with just our simple application.
Rates are usually floating and based on Prime Rate or another index such as LIBOR. As the index fluctuates so does the monthly payment. This is beneficial during periods of falling interest rates, and detrimental when interest rates rise.
Unless the lease has special provisions, payments are generally fixed for the term of the lease. Fixed payments make budgeting and cash flow management much easier.
Banks tend to fee you to death. Banks use fees to boost their rates of return on loans. Includes application fees, origination fees, commitment fees, schedule fees, funding fees and charged for expenses associated with approving and executing the loan application.
Unless the lease has special provisions, payments are fixed for the term of the lease. Fixed payments make budgeting and cash flow management much easier.
Since bank financing makes you the owner of the equipment, your only tax advantage is the depreciation and the loan interest.
Lease payments may be 100% deductible or may be a form of accelerated depreciation depending on your company’s financial structure.
