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You're Not Alone
Leasing is enormously popular as an equipment acquisition strategy. In fact, almost one third of
all equipment acquired in the U.S. each year is acquired on a lease contract. That is well over $200
Billion. Furthermore, about 80% of all companies (including almost all of the largest ones) lease some,
or all, of their equipment. This has made leasing the largest single source of external corporate
finance in America.
The popularity of leasing stems from such factors as favorable financial reporting rules, the ability
to expense payments for tax purposes, the ever increasing pace of technological obsolescence and
leasing's effectiveness in improving return on investment and other financial ratios.
Most types of equipment - new and used - can be leased; and Access Capital, as an emerging leader in
the leasing industry, leases and finances almost all of them.
Here are some of the reasons why companies lease more and more equipment:
Preserve Working Capital
Leasing your equipment from Access Capital conserves your working capital for use where it will
produce the best return. This could mean more money for R & D, Marketing and Inventory - or for
investment in appreciating assets such as real estate.
Budget Considerations
Low payments on an Access Capital lease can make it possible to fit your equipment investment into
the tightest budget constraints and can make the difference between being able to get the equipment you
need now - or waiting years.
Flexibility
An Access Capital lease can cover soft costs such as installation, freight and extended warranties
in addition top the equipment itself. These soft costs are not usually covered by other types of
financing.
Cost Control
Access Capital leases incorporate easy to budget fixed monthly payments. Fluctuations in the prime
rate and other economic fluctuations can not alter your costs over the term of the lease. Payments can
be adjusted to specific cash flow considerations such as seasonal fluctuations, the need for ramp up
time on new systems and trade up considerations to protect against obsolescence.
Credit Line Maintenance
An Access Capital lease does not impact your available credit line funds. It is like getting an
additional line of credit. Also, in many instances, the lease can be structured as an off balance sheet
transaction and thus not considered a liability for financial reporting purposes. This is important
if your bank covenants mandate maintenance of certain financial ratios.
End of Lease Options
Access Capital can structure your lease to include your preferred end of lease option. You can
purchase the equipment at the "fair market value" or for a predetermined amount as low as one dollar.
You can also return the equipment or use it as a trade in to upgrade to newer and more sophisticated
equipment.
Tax Advantages
Qualifying payments on an Access Capital lease are 100% deductible as an expense as opposed to only
being able to deduct depreciation and interest expense, so your cost recovery is faster. In addition,
certain tax law provisions may make it possible for you to expense the entire cost of the equipment now,
even though you are paying for the equipment over time.
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