Business Lease
If you are a business owner with slow pays on your credit, you may want to consider a Collateral Lease for your next equipment purchase. It has been a tough couple of years. It finally looks like the economy may be gaining traction to accelerate again. Even though you have tried to pay all of your bills on time, many of your clients have been slow paying you, which in turn has given you some cash flow issues and has made you late on some of your payments.
Part of the reason for this is that lots of leasing companies are under severe pressure to maintain competitive whilst tackling falling residual values and, in some cases, have experienced difficulty obtaining large-scale credit finance as a result of the credit crunch.Furthermore, without checking the “small print” it can often prove difficult to decipher the different quote formats and be certain that all the quotes you have are produced on the same basis i.e. the same payment profile, terminal contract mileage, vehicle specification, etc.By using a combination of different leasing companies for fleet vehicles, rather just relying upon one single supplier, fleet operators can be sure that they’ve secured the best market rate on every requirement, every time, and can feel safe in the knowledge that they’ve minimised their exposure to excessive price increases and fiscal fluctuation.
Where leasing companies enjoy sole supply, and there is no comparison of their rates against competitors, prices may start to increase and, over a period of time, fleet operators could find themselves “paying over the odds”. Market evaluation injects competition and, ultimately, ensures it’s the customer who benefits not the leasing company.Surely with the raft of different leasing companies in the market the task of obtaining quotes, ensuring they’re all produced on the correct terms and comparing them all every time a new, or replacement, vehicle is required is a huge task?
The ease with which your business can obtain a capital lease as well as the low amount of start-up capital that is required makes the capital lease an attractive option. By classifying a lease as either capital or operating lease, you will be able to determine how payments for the lease will be treated in the financial statements. The main point of difference between operating leasing and capital leasing is how the asset is owned as well as how to depreciate it. The operating lease involves ownership of the asset by the financial institution which must then allow for its depreciation. On the other hand, with capital leasing, the asset is the property of your company or business, and thus is much like a cash purchase transaction.
Often they provide their services to the customer free of charge as they get paid by the leasing companies and, more often than not, they can secure cheaper rates than the same leasing company direct, ensuring you have only one point of contact but access to some of the best rates in the market. You win every time!
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