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EFSI Leasing |
Bank Loans |
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EFSI offers
fixed rate financing. Payment remains the same for full term
of lease. Rates are low when compared with banks Terms and
Conditions. |
Banks usually
require floating rates for loans. Rates are low now but will change
as prime changes. Banks may require compensating balances and/or
charge substantial fees. |
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EFSI offers
100% financing and may finance the soft costs associated with the
equipment. |
Banks often
require down payments of 20% to 30% or more and may limit terms to
36 months or less with floating rates. |
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With EFSI you
expand your credit lines beyond your bank’s line of credit, building
more resources for your growth. |
An equipment
loan is a portion of your total credit exposure, and may limit your
access to working capital or other required funding. |
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EFSI has
flexible terms and programs to meet your cash flow needs.
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Banks, in
general, are not set up for step payments, delayed start of
payments, or other unique structures. |
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The leased
equipment is usually all that is needed to secure a lease
transaction. |
A loan usually
requires the borrower to pledge other assets for collateral. |
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More of the
cash flow, especially the option to purchase the equipment, occurs
later in the lease term when inflation makes dollars cheaper.
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A larger
portion of the financial obligation is paid in today’s more
expensive dollars. |
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If structured
properly, you can make your lease payments with pre-tax dollars and
treat them as a business expense. |
You must
capitalize the bank loan for tax and accounting purposes. |
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The end user
transfers all risk of obsolescence to the lessors, as there is no
obligation to own equipment at the end of the lease. |
The end user
bears all the risk of equipment devaluation because of new
technology.
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When leases
are structured as true leases, the end user may claim the entire
lease payment as a tax deduction. The equipment write-off is tied
to the lease term, which can be shorter than IRS depreciation
schedules, resulting in larger tax deductions each year. The
deduction is also the same each year, which simplifies budgeting
(equipment financed as a conditional sale lease is treated the same
as owned equipment). |
End users may
claim a tax deduction for a portion of the loan payment as interest
and for depreciation, which is tied to IRS depreciation schedules. |
