LEASING OPTIONS: GET THE RIGHT LEASE FOR YOUR EQUIPMENT!

Capital Funds Leasing offers a variety of commercial equipment leasing options. One of the many advantages to using Capital Funds Leasing is our ability to provide the best lease option for your business' equipment needs. We offer the different types of leasing options:

Tax Lease or True Lease

Leasing commercial equipment with a True Lease or Tax Lease means you will not have legal ownership of equipment, but will have use of such equipment for the term defined in the lease. If the equipment you need is subject to rapid advancements in technology, such as computers, the Tax Lease/True Lease is could be the best option. Financing commercial equipment with this lease option can mean lower monthly payments and in many cases tax deductions for lease payment amounts.

Tax Lease/True Lease offers businesses several options at the end of term

  • Purchase the equipment at the fair market value
  • Extend the lease
  • Return the equipment
Operating Lease

The best option for short-term equipment needs! An Operating Lease is any lease that does not qualify as a Capital Lease. The Operating Lease provides you the greatest flexibility by allowing you to lease needed equipment for a shorter period than the actual (expected) life of the asset. Since the equipment is returned to the vendor while it still has a useful life, you may often benefit from additional services provided by the vendor, specifically maintenance and insurance.

Since an Operating Lease does not contain any of the provisions that would qualify it as a Capital Lease, the lease is not treated as a 'sale/purchase'. As a result, you account for it as a rental expense; therefore it is not capitalized.

Capital Lease

With a Capital Lease, legal ownership of the equipment may ultimately be transferred to you at the end of the lease period. However, the Capital Lease is treated as a sale immediately for accounting purposes, with the equipment vendor listing it as a sale and you as a purchase at the start of the lease period. Reporting a Capital Lease as a sale/purchase at the start of the lease period allows the equipment vendor to report the value of your future payments as assets, while you can also treat the equipment as an asset (and claim depreciation) as well as deduct interest expense.

For the lease to be defined as a Capital Lease, at least one of the following conditions must exist in the lease:

  • Transfer of legal ownership to you at the end of the lease term.
  • Option to purchase the asset at a discounted price at the end of term.
  • The term of the lease is at least 75% of the estimated life of equipment.
  • Discounted lease payments are equal to at least 90% of the fair market value of the equipment.
Terminal Rental Adjustment Clause Lease (TRAC)

A terminal rental adjustment clause lease (TRAC Lease) combines all the advantages of leasing while retaining the option to purchase the equipment at the end of the lease term at a price set when the lease term began!

Your monthly payments on a TRAC Lease are determined by the purchase price you establish at the start of the lease period. Depending on how you want to spread out your costs, you can select a higher end-of-term purchase amount for a lower monthly payment, or keep the purchase price low with higher monthly payments. This flexibility of payment options is key in this commercial equipment leasing option and can help businesses improve and better manage cash flow

You have the following options at the end of your TRAC lease term:

  • Buy the equipment for the pre established residual purchase amount.
  • Replace / trade equipment.
  • Continue leasing by financing the residual amount.
  • Return the equipment for a rental adjustment amount. Based on the resale value of the equipment compared to the residual purchase amount.

Our commitment to providing the best leasing solution, puts us above other financing companies in the industry. No matter what type of commercial equipment you plan to lease, we can provide your company with the best options available.

Apply online today or call us toll free 1-888-606-5327 to speak with one of our financing specialists at no cost with no obligation.Contact us today to learn more.

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