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M.J.M. Capital, Inc.
Equipment Leasing
Equipment Leasing
| Call 866.MJM.CAP2 or 866.656.2272 to find out more. |
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An equipment lease is similar to a loan, but the lessor (lender)
purchases the equipment, and then leases or rents the equipment
to the lessee (customer). Equipment leases usually only require an
initial cash outlay totaling first and last month payment plus
documentation fees. When the lease term is up the lessee has the
option of purchasing the equipment. Leases typically are written for
24 to 60 months. Purchase options vary from lease to lease, but
typical buyouts include $1.00, $101, fair market value, or a
predetermined percentage of the original equipment cost such as
10%, or 20%.
Leases with $1.00, $101 buyouts are capital leases, which
equates to a lease to own situation. Capital leases are capitalized
on the company’s balance sheet like a loan, and the asset is
depreciated. Leases with a fair market value, or a buyout of 10% or
more is called an operating lease, or true lease. The operating
lease, or true lease is expensed as the payments are made, and
neither the asset, or debt is carried on the company’s balance
sheet. This is referred to as off balance sheet financing.
Qualifying for an equipment lease many times is quicker, and
easier than obtaining a bank loan for your business. Lease
approval amounts up to $150,000 can be acquired with only a one
page application. That means no tax returns, or financial
statements need to be provided. Application submittal to approval
can take less than 24 hours. Companies with strong enough
corporate credit, and that meet certain criteria can qualify for Corp
only leases where the officers/owners do not have to personally
guarantee the lease.
purchases the equipment, and then leases or rents the equipment
to the lessee (customer). Equipment leases usually only require an
initial cash outlay totaling first and last month payment plus
documentation fees. When the lease term is up the lessee has the
option of purchasing the equipment. Leases typically are written for
24 to 60 months. Purchase options vary from lease to lease, but
typical buyouts include $1.00, $101, fair market value, or a
predetermined percentage of the original equipment cost such as
10%, or 20%.
Leases with $1.00, $101 buyouts are capital leases, which
equates to a lease to own situation. Capital leases are capitalized
on the company’s balance sheet like a loan, and the asset is
depreciated. Leases with a fair market value, or a buyout of 10% or
more is called an operating lease, or true lease. The operating
lease, or true lease is expensed as the payments are made, and
neither the asset, or debt is carried on the company’s balance
sheet. This is referred to as off balance sheet financing.
Qualifying for an equipment lease many times is quicker, and
easier than obtaining a bank loan for your business. Lease
approval amounts up to $150,000 can be acquired with only a one
page application. That means no tax returns, or financial
statements need to be provided. Application submittal to approval
can take less than 24 hours. Companies with strong enough
corporate credit, and that meet certain criteria can qualify for Corp
only leases where the officers/owners do not have to personally
guarantee the lease.
| Equipment Leasing Article |