Why lease?
The advantages of leasing.
Leasing is a
tool - a tool that works for you in ways not possible with other means of
capital finance. Considering that 80% of all U.S. companies lease some or
all of their equipment is proof that leasing works. Leasing helps growing
businesses clear the hurdles that typically confront them - hefty down
payments, monthly finance costs and shrinking credit lines.
To compete,
you must be able to keep pace with the wave of new technology as it becomes
available. U.S. Commerce allows you to catch that wave and use it to your
benefit - increased revenue. Leasing allows you to tailor your expenditures
to your revenue - making that all-important cash flow situation work to your
benefit by increasing flexibility, which allows you to adapt quickly to
today's fast paced economy.
Ownership
of equipment alone will not produce revenue. It is the use
of equipment which is productive. When viewed from this
perspective, leasing is frequently less expensive.
1.
CONSERVATION OF CAPITAL
Cash remains untouched and available for other profitable purposes. Cash is
king. Cash should be allocated for purchases of items that financing may not
be best suited. Cash is best used for expendables and soft costs.
2. LEAVES
BANK LINES UNTOUCHED
Normally, a lender will not reduce a line of credit when equipment is
leased. However, when the equipment is financed, it consumes available
credit. As a bank customer you have a finite credit limit, which is used as
a loan, mortgage, revolving line of credit, overdraft protection, etc. The
more this credit is utilized, the less there is for items that cannot or
should not be leased. Items in this category would be inventory, additional
labor expense, raw materials, buildings or leasehold improvements.
3. CLEANER
BALANCE SHEET
Lease payments may be entered as footnote items on a balance sheet and may
not increase your liabilities as a loan does. This is important to obtain
additional credit.
4. TAX
SAVINGS AND IMPROVED CASH FLOW
The full cost of leasing can often be treated as an expense deduction for
income tax purposes and may result in a larger tax deduction than if you
were claiming a depreciation expense. This can mean substantial tax savings
and improved cash flow.
5. BETTER
TERMS
Lease payments usually can be extended at fixed rates over a longer period
of time than conventional bank financing… and without large down payments.
Typically banks require a 20% down payment. With a lease, typical terms
require one advance payment and a security deposit which total approximately
3%-5% of the equipment cost.
6.
SIMPLIFIED RECORDKEEPING
One monthly rental covers the entire cost of the equipment. Reduce your
effort in tracking tax rules and regulations regarding depreciation and
amortization.
7.
CONVENIENCE
Convenience is a surprisingly important part of leasing's appeal. A lease
may be consummated in a few days. You can be up and running, making a profit
in no time at all.
Frequently Asked Questions
How much
are my monthly payments?
Contact U.S. COMMERCE and a representative can provide estimated payments
for varying cost and lease structures. Or, submit a lease application and we
will provide an exact payment on the terms you request with processing of
your application.
Who can
lease?
Any business, all corporations, partnerships, sole-proprietorships, State
and Country municipalities, school Districts, Colleges, and Universities.
A-jess and U.S. COMMERCE cannot lease equipment to an individual for
personal use.
Is a down
payment required?
Typical lease terms require one advance payment and a security deposit which
total approximately 3%-5% of the total equipment cost.
Is there a
minimum purchase amount?
Yes: $2,500. Your order may consist of any combination of equipment sold by
A-jess.
Can the
lease be cancelled?
No, but the equipment can be traded in for new, leased equipment before the
expiration of the initial term.Lessee is responsible for any deficiency
between value of trade-in and the balance due under original lease agreement
What about
insurance?
For the protection of both U.S. COMMERCE and you, U.S. COMMERCE requires
that the equipment be insured. Insurance is available through U.S. COMMERCE,
or can be provided by your own insurance company.
What
happens at the end of the lease?
At the end of the lease term, you have the opportunity to take ownership of
the equipment for the dollar amount specified by your purchase option.
Whether the lease carries a 10% Purchase Option, Fair Market Value Purchase
Option, or One Dollar Buyout you may exercise the option, return the
equipment to U.S. COMMERCE, or continue with the lease.
What types
of lease plans are available?
Contact U.S. COMMERCE and a representative would be happy to explain the
many types of plans available to our A-jess customers.
Can I add
to a lease at a later date?
Yes. Once you have your lease, U.S. COMMERCE can usually make convenient
arrangements for you to make additional acquisitions by simply adding to the
existing lease.
For advice on
leasing, contact U.S. COMMERCE by phone, e-mail, or fax and a representative
will be happy to discuss your options and help determine a suitable lease
plan for your continued success.
