Financing

Benefits of Leasing

According to the Equipment Leasing Association
 * 80% of all companies lease all or some of their equipment
 * Leasing helps businesses keep their equipment state-of-the-art
 * More companies acquire equipment through leases than through loans

Keeps Technology Current
 * Upgrade equipment to keep pace with fast changing technology
 * Avoid equipment obsolescence
 * Eliminate headaches caused by equipment disposal
 * Simply return the equipment at the end of the lease
 * Equipment add-ons and trade-ups can easily be written into the lease

Improves Cash Flow and Budgets...
 * Eliminates financial "peaks and valleys" with predictable payments and budgeting
 * 100% financing provides affordability with no up-front cash or down payment
 * Preserves working capital and frees up credit lines
 * Overcome capital budget restraints by expensing lease payments

Provides off-balance sheet reporting and potential tax savings...
 * Allows customers to retain available credit for other needs
 * Provides potential tax and accounting benefits - consult your tax advisor for details

Leases and Section 179

Did you know that your company can lease equipment and still take full advantage of the Section 179 deduction?  In fact, leasing equipment with the Section 179 deduction in mind is a preferred financial strategy for many businesses, as it can significantly help with not only cash flow, but with profits as well.

Non-Tax | Capital Lease

The main benefit of a non-tax capital lease is that you can still take full advantage of the Section 179 Deduction, yet make smaller payments.  With a non-tax capital lease you can acquire and write off $250,000 worth of equipment this year, without actually spending $250,000 this year.  A small business that is managing cash flow can leverage a non-tax capital lease and still take the Section 179 Deduction.

Examples of non-tax capital leases include a $1.00 Buyout, and a 10% Purchase Upon Termination (PUT) Lease.  In many cases, the amount you save in taxes will be MORE than the total of you first year's payments.

Advantages of Leasing and Financing

The obvious advantage to leasing or financing equipment and then taking the Section 179 Deduction is the fact that you can deduct the full amount of the equipment, without paying the full amount this year.  The amount you save in taxes can actually exceed the payments, making this a very bottom-line friendly deduction (you are reading this correctly - in many cases, the deduction will actually be profit).

information provided by section179.org & Highland Capital

 

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