US Funding LLC - Headquarters:
300 Lackawanna Avenue, Suite 3, Woodland Park, NJ 07424
Steve Schachtel - President
Phone: 973-339-9900 Ext. 101 - Fax: 973-339-9899
What are the advantages of leasing?
Conservation of (Working) Capital:
With an equipment lease, you get 100% financing so the amount of cash needed up-front is reduced. Even if you have the cash to purchase your equipment it may not always be the best choice. With equipment leasing, cash can be used for other business uses such as expanding sales, new marketing programs, quantity discounts, increasing inventories, opening a new line of business, or simply cash reserves. If you decide not to lease you will have to come up with the entire amount for a cash purchase OR a sizeable down payment as well as higher payments for traditional financing.
Preservation of Credit Lines: A lease preserves bank lines of credit for working capital, seasonal requirements, other appreciating investment opportunities, or emergencies. Equipment leasing is like opening an additional line of credit.
Better Terms and Structure than Banks:
Most bank loans require larger down payments, compensating balances, additional collateral, or restrictive covenants. They are not flexible in their payment schedules and may tie the financing to a floating interest rate. Equipment leasing has fixed payments, flexible schedules, low down payment, and does not require extra collateral.
Off-Balance Sheet Financing:
Larger companies often have a need to maintain certain debt-to-equity ratios or comply with debt covenants. Operating leases do not show on the balance sheet as liabilities and the equipment is not counted as an asset, thereby keeping the ratios unaffected.
Operating leases are generally treated as fully deductible direct operating expenses, which mean a lower taxable income. In addition, equipment leasing can be a tool to avoid certain negative impact of the Alternative Minimum Tax. Your tax professional should be consulted to determine what percentage of other types of leases could be deducted.
Equipment leasing with US Funding is easy and convenient and our documentation is minimal
Hedge against Inflation:
With the lower, fixed-rate payments of an equipment lease, you're protected against inflation. With equipment leasing, cash outlays are deferred as compared to an upfront purchase. Inflation will then lessen the cost of future lease payments, since the payments will be made with "cheaper" dollars. You will be making your monthly payments to the leasing company with ever-inflating dollars during the term of the lease. This actually reduces the cost of financing to you in real dollars, which is an advantage that is often overlooked.
Maintains Owner's Equity:
Many companies in a growth phase sell stock to raise money for expansion. A well-conceived lease program can allow a company to grow while minimizing the need for equity financing.
Equipment leasing simplifies accounting procedures and eliminates depreciation scheduling. A fixed lease cost ensures consistent control over equipment expenditure.