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Facts About Leasing Your Equipment --The Benefits & Pitfalls
Sunday, March 06, 2005
While 80% of all US businesses have leased equipment at one time or another, some may not be aware of the benefits, nor of the hidden costs involved with leasing.
Benefits of Leasing Equipment
Leasing is Flexible.
Companies have different needs, different cash flow patterns, different and sometimes irregular streams of income. For example, startup companies typically are characterized by little cash and limited debt lines. Mature companies might have other needs - to keep debt lines free, to comply with debt covenants, and to avoid committing to equipment that may quickly become obsolete. Therefore, your business conditions - cash flow, specific equipment needs, and tax situation may help define the terms of your lease. Moreover, a lease provides the use of equipment for specific periods of time at fixed rental payments. Therefore, leasing allows you to be more flexible in the management of your equipment.
Leasing is Cost-Effective.
Equipment is costly and some of the costs are unexpected. When you lease, your risk of getting caught with obsolete equipment is lower because you can upgrade or add equipment to best meet your needs. Further, your equipment needs can change over time due to changes to your company, such as diversification. Leasing allows you to stay on the cutting edge of technology.
Leasing Has Tax Advantages.
Rather than deal with depreciation schedules and Alternative Minimum Tax (AMT) problems, you, the lessee, simply make the lease payment and deduct it as a business expense.
Leasing Helps Conserve Your Operating Capital.
Leasing keeps your lines of credit open. You don’t tie up your cash in equity. Also, you avoid costly down payments. With other advantages such as off-balance sheet financing, leasing helps you better manage your balance sheet.
Although leasing does provide benefits to business owners, there are other attendant costs that business owners need to be aware of. Learn more by reading the full article at the Small Business Administration.
Benefits of Leasing Equipment
Leasing is Flexible.
Companies have different needs, different cash flow patterns, different and sometimes irregular streams of income. For example, startup companies typically are characterized by little cash and limited debt lines. Mature companies might have other needs - to keep debt lines free, to comply with debt covenants, and to avoid committing to equipment that may quickly become obsolete. Therefore, your business conditions - cash flow, specific equipment needs, and tax situation may help define the terms of your lease. Moreover, a lease provides the use of equipment for specific periods of time at fixed rental payments. Therefore, leasing allows you to be more flexible in the management of your equipment.
Leasing is Cost-Effective.
Equipment is costly and some of the costs are unexpected. When you lease, your risk of getting caught with obsolete equipment is lower because you can upgrade or add equipment to best meet your needs. Further, your equipment needs can change over time due to changes to your company, such as diversification. Leasing allows you to stay on the cutting edge of technology.
Leasing Has Tax Advantages.
Rather than deal with depreciation schedules and Alternative Minimum Tax (AMT) problems, you, the lessee, simply make the lease payment and deduct it as a business expense.
Leasing Helps Conserve Your Operating Capital.
Leasing keeps your lines of credit open. You don’t tie up your cash in equity. Also, you avoid costly down payments. With other advantages such as off-balance sheet financing, leasing helps you better manage your balance sheet.
Although leasing does provide benefits to business owners, there are other attendant costs that business owners need to be aware of. Learn more by reading the full article at the Small Business Administration.
Business Leasing For Dummies
Thursday, March 03, 2005
Want to gain a basic understanding of the terminology of leasing? Need to introduce your staff to the basic concepts? This out-of-print book might be a great introduction. While the book is out-of-print, books like this can usually be found used at Amazon.com. Try this search for Business Leasing for DummiesA reviewer had this to say,
"For anyone in the leasing business, this is a wonderful book to own. It is a complete training course in equipment leasing. The author has the only good explanation I could ever find of concepts such as leveraged leases. This book is a _must_ for anyone in the equipment leasing industry.
I wish that the author had worked out a few examples with the reader on cash flows and pricing of leases. There is some math that is not very clear to the first time reader. I also wish that there was some more information about vendor leasing and lease origination.
Regardless, this is one heck of a training course in leasing for under 20 dollars. If you are in any way involved with leasing, this is money well spent."
Market Value of Hotels Owned by AAHOA Members Totals Nearly $40 billion
Tuesday, March 01, 2005
"According to the Asian American Hotel Owners Association (AAHOA), a premier hospitality organisation, Indian American hoteliers own more than 20,000 hotels, which have one million rooms representing over 50 percent of the economies' lodging properties and nearly 37 percent of all hotel properties in the United States." The market value of hotels owned by AAHOA members totals nearly $40 billion. AAHOA members create over one million jobs. Read the full article here.In addition to serving the equipment leasing industry, GCR Capital also works with many hoteliers to help them with their furniture, fixtures and equipment (FF&E) purchases and upgrades.
One of the organizations that we are proud to be members of is AAHOA. AAHOA, American Hotel Owners Association, is a premier hospitality organization and we are looking forward to being with them at their event in Ft Lauderdale, Florida in March 2005. We hope to see you there.
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