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What is Equipment Leasing?

Posted 7/21/2017
By Marketing
River Capital is an equipment leasing and financing solutions provider located in Westlake, OH. Starting as a small, direct lender, River Capital has grown into a full service, independent leasing company over the course of 20 years. We provide our customers with flexible leasing options so they can keep current with innovative technology.

The Equipment Leasing and Financing Association (ELFA) research shows that eight out of ten U.S. companies lease some or all of their equipment.

So, What is Equipment Leasing?
Equipment leasing is in its simplest form is a lease where you make monthly rental payments in exchange for the right to use equipment. It is important to realize that equipment leases are not loans, and their costs are figured out differently than typical loans. Equipment financing uses equipment as security on a loan.

Equipment Leasing Options
River Capital is happy to work with your company to structure a leasing option that will best fit your business. Some examples of equipment leasing options are:
  • Capital Lease: This option results in the ability to purchase the leased equipment at the end of the term for many times only 10% of the cost of the equipment. However, this option typically has higher lease payments throughout the term.
  • The True Lease: Companies are given the ability to decide if they want to purchase the equipment, return the equipment, or roll over the lease into upgraded equipment at the end of the term. The terms of this lease depend on the option chosen.
  • The Master Lease: When a company needs to lease multiple pieces of technology, a master lease is implemented, keeping all of the pieces of equipment under one contract. This is our most popular form of leasing at River Capital.
  • The Skip Lease: A skip lease allows the lessee the opportunity to skip payments some months and make higher payments during other months.
  • The Deferred Lease: Payment on this lease begins 30-90 after the contract has been signed. This helps get companies up and moving before they have the necessary capital to make payments on a lease.
Benefits of Leasing:
  • Conserve Capital — Preserve working capital that can be used for other areas of the business
  • Preserve Bank Lines — Maintain open balances on bank credit and equity lines
  • Full Life Cycle Leasing — Covers equipment through the life cycle of the lease
  • Obsolete Technology Protection — Upgrade and replace equipment to keep up with rapid technology innovations
  • Avoid Inflation — Lock in the rates while your payments will be made with tomorrow’s inflated dollar
  • Accounting Benefits — Tax-oriented leases can provide tax and accounting benefits to the customer
  • ROI Achievement — Lower monthly payments increase ROI
  • No Down Payment Required — Traditional leases do not require a down payment
 
Let River Capital help you figure out what options are best for you company today!