Many business owners today prefer equipment finance agreements to traditional $ 1 or 10% buyout leases. Customer has option to handle their own sales and property taxes.
Lease company requires physical damage insurance coverage and allows the business owner to decide level of general liability insurance. Early payoff options are typically discounted earlier and more aggressively with equipment finance agreements.
Another appreciable difference between an equipment finance agreement and a lease with option to buy arrangement is that you gain full ownership of the capital equipment from day one. Even though you will be paying monthly payments on the purchase price throughout, you can still claim the full amount of the purchase price on your year end taxes, just as you can with a capital lease.
ReplyDeleteThere is also a difference in the types of businesses that take advantage of such an arrangement. This is not meant to be used for simple expansions, like upgrading a business’ computer system. It is better used for purchasing big ticket capital equipment, like construction vehicles, major production line equipment, or even vehicles. The terms are so much more reasonable than those in commercial loans that a business with limited capital would be foolish to not take advantage of it while they can. Equipment Finance Agreement
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ReplyDeletekeystone equipment finance