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Benefits of Leasing
Financial Benefits of Leasing
Leasing Tax Benefits
A lease can be structured so that it may have
certain tax advantages over the other forms of equipment acquisition
methods.
Leasing Improves Return on Assets
Return on assets (investment or equity) frequently
is used as a standard of profit center evaluation. Leasing will
have a positive effect when compared to ownership.
Tax Advantages
For example, lease payments, unlike loan payments
are sometimes fully tax deductible. With the new tax laws, some
previous depreciation advantages of ownership are becoming far less
attractive when compared to the benefits of leasing. Certain types
of leases are viewed as preferable by accountants to avoid Alternative
Minimum Tax Liability. Each company should discuss its tax situation
with a tax advisor.
Improved Depreciation
Purchasing of equipment causes the user to incur
a cost recovery expense which is called depreciation expense. In
cases where the "lease cost recovery" is over a shorter
term (less than 5 years) than standard "MACRS depreciation",
a tax benefit is created that favors leasing.
Financial Reporting Advantages
When compared to a loan for the purchase of equipment,
the use of leasing will affect the balance sheet as leases typically
do not appear on the lessee's balance sheet as either assets or
liabilities.
Benefits to Customers
100% Financing
Standard Capital Corporation only requires the
first and last monthly payments in advance.
Tax Savings
Some lease payments are fully deductible for tax
purposes, which result in a lower after tax cost of capital.
Preserve Working Capital
Leasing allows the customer to retain cash for
current needs or other investment opportunities.
Conserves Credit Lines
By leasing equipment, the customer can maintain
available lines of credit at other financial institutions for emergency
needs or other cash flow purposes.
Immediate Return on Investment
Profit from the utilization of equipment with
a very nominal up-front cost.
Simplifies Bookkeeping Procedures
If a lease is structured so that lease payments
are fully tax deductible, there's no need for cumbersome depreciation
or amortization schedules which separate the principle and interest.
Acts as a Hedge Against Inflation
Lease payments are fixed over the term of the
lease end and, therefore, are not subject to any inflationary increases.
The net cost of the lease will actually decrease relative to revenues,
which will increase during inflationary times.
Overcoming Budget Limitations
Organizations restricted to a yearly
capital budget are able to acquire additionally needed equipment
with affordable monthly or quarterly rental payments.
Standard Capital Corporation's Lease Line
As a Standard Capital Lease Line member, your
customer can expect automatic credit line increases and benefits
such as special promotions and advantageous upgrade capabilities.
Benefits to Sales Representatives
Overcomes the Dollar Barrier Associated
with Retail Cost
Leasing provides the ability to reduce
the total cost of an equipment acquisition to a convenient monthly
payment. Since cost is usually the primary objection raised in the
closing cycle, the utilization of a leasing program easily allows
the sales representative to overcome this specific hurdle.
Cost Justifies Equipment
The utilization of equipment either
produces income or generates savings for a company. Reducing the
acquisition to a monthly payment can dramatically demonstrate the
revenue and/or savings for the business and is a very effective
closing tool.
Eliminates the Need for Discounting
Since leasing reduces the equipment
cost to affordable and convenient monthly payments, the equipment
can actually be sold at retail or list price. Once the budgetary
requirement of the customer is determined, the appropriate lease
term can be selected. Our competitive rates allow for payments
to be modeled from full list price and thereby eliminates the need
to offer profit reducing discounts.
Increase the Size of your Order
With our convenient add on and upgrade
policy, the customer can continue to enhance the original equipment
acquisition which has the effect of building repeat sales. With the
Standard Capital Consolidated payment plan, the customer makes one
convenient payment to cover all these schedules.
Brings Out Objections for a Trial Close
Leasing can be used as a trial close
when offering equipment with a "cash or lease" alternative,
rather than a buy or not to buy option.
Builds Repeat Sales
Once a customer leases through Standard
Capital Corporation, a dealer representative will be advised of
any additional credit lines available to the customer for future
purchases.
Quicker Close/Shorter Sales Cycles
With Standard Capital Corporation's
self write lease program, you'll be able to complete an order
in the prospect's office and shorten your sales cycle by eliminating
needless follow-up for payment terms.
Lease Commissions
Leasing can generate fee income for
your company. Ask your Standard Capital Representative for details.
Benefits to Vendors
Rapid Credit Decisions
Standard Capital Corporation delivers
the quick turnaround on credit decisions that is so important to
vendors. Ordinarily, credit applications are processed within 6
business hours. We have the capability of handling "rush"
transactions and, for Lease Line clients, can provide virtually
instantaneous decisions.
Immediate Invoice Payments
Invoices are paid immediately upon
receipt of verification of delivery and installation. Certain qualified
vendors can participate in our advanced funding program which alleviates
the requirement to tie your working capital.
Self-Write Lease Form
This simple document provides the
closing tool that allows transactions to be signed on the spot,
eliminating potential paperwork delays that contribute to buyers
remorse and lost deals.
Competitive Rate Structure
Standard Capital Corporation offers
rates which are among the most competitive available in the leasing
industry. We have lease terms from one to five years as part of
our standard program.
Flexible Payment Structures
Innovative payment plans include
deferred payment options of up to 90 days and our Graduated Lease
Payment Program.
Toll-Free Assistance
You Account Executive or Sales Coordinator
can be reached via a convenient toll free 800 number.
Computer Assisted Sales Staff
Standard Capital Corporation is able
to provide you with the current status on any of your accounts.
(Please contact your Account Executive or Sales Coordinator for
assistance). This can prove helpful when credit lines have been
established to assist in your future sales.
Standard Capital Lease Line
This program reserves credit lines
for your customers beyond the amount of the initial transaction.
This proves invaluable when upgrading or adding equipment since
the customer is already pre-approved and any additional credit processing
is eliminated.
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