Banks and other financing sources tend to move slowly, drawing out the process of application, review
… and, finally, you receive your equipment.
According to the U.S. Small Business Administration:
Fair Market Value(FMV)
This program is often chosen by those who:
o Are interested in tax and accounting benefits that come with off-balance-sheet payments which are considered an operating expense.
o Wish to simplify asset management and reduce TCO (total cost of ownership), syncing the lease term with the technology cycle.
o Use a FMV lease’s lower monthly payments to stretch budgeted dollars.
o At lease’s end the equipment can be purchased for its then Fair Market Value.
$1 Buy Out
The $1 Buyout option is intended for customers who intend to own the equipment at lease’s end. Leasing can positively effect a company’s bottom line with such benefits as enhanced earnings, improved tax treatment and increased cash flow while accessing the best available equipment on the market. Leasing can help companies obtain the equipment they need today, without drawing down lines of credit or capital reserves. And with leasing, companies pay for the equipment as it is being used, so the equipment pays for itself. Equipment leasing is a proven, valuable financial tool used to optimize the growth and profitability of today’s business.
Term Residual Lease(TRL)
**The Term Residual Lease (TRL) acts as an option to either purchase or return the equipment at the completion of the Original Lease Term. Compared to a standard FMV Lease of 12, 24, 36, 48, or 60 months, the term on a TRL is shortened to 21, 31, 42, or 52 monthly payments. The Lessee can return the equipment after the Original Lease Term or they can choose to purchase the equipment by making 3 additional monthly payments on a 21 month term (24 payments to own), 5 on a 31 month term (36 to own), 6 on a 42 month term (48 payments to own), or 8 on a 52 month term (60 payments to own.) The Residual payments are made monthly.
*Certain state have restrictions on leasing programs – Ask your equipment leasing consultant.
FranchiseLeasing.com, in affiliation with Diamond Financial in New Jersey, offers the best in securing the financing you want for all your franchise equipment needs
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