“Those people at TEQlease really get it,” said Phil Vallejo.  “They just understand how the construction business works and want to help and be a part of our growth! We need more lease finance professionals with that mentality.”

“It was a pleasure working with Phil on this project, and I look forward to seeing how our work positively impacts the business.” said TEQlease Senior Account Executive Albert Garcia.  “I’m pleased to have provided a lease structure that satisfied our client’s business and budgetary needs.”

TEQlease Capital provides equipment lease financing solutions for businesses and educational institutions in the United States. TEQlease Capital also offers equipment vendor lease finance programs across all industries. To learn more about TEQlease Capital, visit our website at www.TEQlease.com

The post TEQlease Capital Provides Financing Solution For Vallejo Trucking and Equipment appeared first on TEQlease Capital.

If you are also considering acquiring new equipment, and want to conserve available cash, leasing may be an appropriate solution.  However, before finalizing the purchase or lease of needed tree services equipment, I recommend that companies carefully consider the following 12 tips so they don’t make any costly mistakes.

1. Understand your business credit and organize your financial information before contacting an equipment lease financing provider. Make sure you understand your credit score, your business financial picture, and any discrepancies that might be on your personal credit report or Dun & Bradstreet business credit report.
2. Do the math and determine whether the Section 179 deduction and bonus depreciation will benefit your business or not. Section 179 allows businesses to deduct the cost of qualifying businesses equipment placed in service in 2012 up to $125,000. In 2013, the deduction will drop significantly to just $25,000 unless Congress acts.  Also, get advice from your tax advisor about the acquisition.
3. Determine whether equipment purchases should be made in cash, or whether lease financing makes sense to conserve capital.  Do a lease-versus-buy analysis.
4. Don’t assume your bank or the equipment manufacturer’s captive finance company will offer the best terms. The majority of equipment leases are done by equipment lease providers, and often at better pricing. Always compare rates, lease terms, fees and options.
5. Do due diligence on your proposed financing provider. Once you have a short list of providers make sure to check them out thoroughly. Go to Google and run a search on them. Also run a search on social media sites like Twitter. Work only with established financial solution providers.
6. Don’t pay upfront “application” fees to a bank or equipment financing provider.
7. Be prepared to explain in advance any negative business results to a lease financing provider. For example, if you had a business loss in 2010 explain why.  If you recently won a major contract, explain that too, even if the new business hasn’t yet affected your business results.
8. Understand the difference between a Fair Market Value Lease and a $1 Purchase Option Lease. A Fair Market Value (FMV) Lease is one of the most common leases that businesses select because it offers the lowest monthly payments, provides the greatest flexibility at the end of the lease, and may also provide tax incentives. A FMV lease is often used for acquiring technology equipment. On the other hand, a $1 Purchase Option Lease gives businesses the ability to “purchase” equipment for a $1 at the end of a leasing period. The monthly payments are higher than a FMV lease. In addition, you may have additional financial benefits including depreciation and/or interest expense benefits for tax purposes under either scenario.
9. Describe to the equipment lease financing provider how the equipment acquisition will benefit your business. Provide a projection of cost savings or incremental realizable margins if you have one.  Obviously there is a reason why you want to acquire new equipment.  Make sure your equipment lease financing provider understands exactly what this reason is.
10. Consider bundling multiple equipment acquisitions from different vendors under one lease with an independent commercial equipment lessor. Rates tend to be higher for smaller transactions. Bundling equipment acquisitions generally results in lower rates, is simpler to administer and account for, and also minimizes processing fees.
11. Ask your equipment vendor for payment terms so you can defer a portion of the equipment cost, and coordinate deposits, progress payments, and performance retention payments.  Most equipment vendors will ask for a downpayment, with the balance due either at delivery or with ten to thirty days after delivery.
12. Be careful of earnest money payment requests. An earnest money payment is sometimes required equal to a fixed amount or one month’s rent as a refundable application fee. The earnest money payment can be called an application fee, deposit, due diligence fee, etc. If the lease transaction is approved, the earnest money payment is applied to the first or last rental payment due under the lease. If the lessor declines the lease transaction, the earnest money payment is refunded, but sometimes, if specifically agreed in the lease proposal, a small portion of the earnest payment may be retained as an application or processing fee. Not all lessors require an earnest money payment.

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If you are looking into increasing your capital spending and considering leasing, the first thing to understand is the three most common types of leases: Fair Market Value Lease; $1 Purchase Option Lease; and 10% Purchase Option Lease.

A Fair Market Value (FMV) Lease is one of the most common leases that businesses select in part because of its flexibility. Businesses often select a Fair Market Value lease if the equipment they are acquiring, such as technology equipment, rapidly loses its value once it is placed into operation.

Fair Market Value (FMV) Lease:

1. Offers the lowest monthly payments. An FMV lease is ideal for businesses that want the lowest possible payments and are unsure if they want to acquire the equipment at the end of the lease.
2. Provides tax incentives.  Businesses may be able to deduct the monthly lease payments as an operating expense deduction.
3. Provides the greatest flexibility at lease end. At the end of a FMV lease a business can decide to return the equipment, continue to pay for and use the equipment per your agreement with the lease finance company, purchase the equipment or upgrade it with newer equipment.

A $1 Purchase Option Lease is another of the most common leases that businesses use to acquire equipment today. Each type of lease is useful, depending on the type of equipment and the type of anticipated use. A $1 Purchase Option Lease is often used by businesses or schools when they know they will still be using the equipment for an extended period after the end of the lease term.

$1 Purchase Option Lease:

1. Provides businesses the ability to purchase the equipment for a $1 at the end of the lease term.
2. Monthly payments are higher than a Fair Market Value lease because the lessee is now financing 100% of the equipment cost.
3. Provides additional financial benefits that may include depreciation and interest expense benefits for tax purposes.

The 10% Purchase Option Lease is often selected by businesses who want to keep their options open to purchase the leased equipment at the end of the lease. This lease is most appropriate for businesses that aren’t ready to make a purchase decision at the beginning of their lease.

10% Purchase Option Lease:

1. The lessee usually may purchase the equipment at the end of the lease at a fixed price equal to 10% of the original price.

2.  The monthly lease payment will be lower than the $1 Purchase Option Lease but may be higher than the Fair Market Value Lease.

3.  Provides additional financial benefits that may include depreciation and interest expense benefits for tax purposes.

Not sure which type is best for your business? Please contact us and we will walk through the options with you.

The post Considering Leasing for Your Capital Expenditures? appeared first on TEQlease Capital.

Here are three things to know about a Fair Market Value (FMV) Lease:

1. Offers the lowest monthly payments. An FMV lease is ideal for businesses that want the lowest possible payments and are unsure if they want to acquire the equipment at the end of the lease.
2. Provides tax incentives.  Businesses may be able to deduct the monthly lease payments as an operating expense deduction.
3. Provides the greatest flexibility at lease end. At the end of a FMV lease a business can decide to return the equipment, continue to pay for and use the equipment per your agreement with the lease finance company, purchase the equipment or upgrade it with newer equipment.

If you have any questions regarding the Fair Market Value Lease, please contact us.

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