2016 Equipment Leasing Update

As 2015 comes to a close, the Equipment Leasing & Financing Foundation has released what they saw in 2015 and what they expect to see in 2016. Although the year hasn’t quite come to a close and the numbers aren’t final, it’s looking like annual growth of equipment leasing and financing in 2015 will finish with about a 4.2% growth and 2016 is forecast to be similar.

Why Does Equipment Leasing Continue To Grow?

There are several reasons for the continued growth. The main reason that businesses continue to lease their equipment is because technology changes at such a fast pace that owning computers, telephony and even software doesn’t provide the investment benefit it once did. Another primary factor is that once again small businesses are growing. The trend for entrepreneurship and “main street businesses” continued in 2015 and although it is beginning to slow, is expected to grow at around 2% again in 2016.

What Should Businesses Expect in 2016?

There are three main differences businesses will see in 2016 regarding equipment leasing. Perhaps the most beneficial is that Section 179 of the current tax code has passed so that the $500,000 deduction limit is now permanent. Your tax professional will also explain the bonus depreciation extension that is good through 2019. Of course there are limitations on this expansion but your tax professional should be fully versed on the changes.

Another change businesses will see is that the SEC has issued recommendations for changes to increase transparency of leased items on balance sheets. This applies to leases greater than 12 months. Although this doesn’t affect every business, it is good to know about.

Of course the last change is one we’ve all heard about and expected for some time now. The Federal Reserve approved a one quarter percent increase to the short term interest rates. It is expected that rates will begin to tick up, however, the increase was small and another increase isn’t likely until at least the middle of 2016.

Why eLease?

eLease has been providing equipment financing to small and medium sized businesses for over 20 years. Our ability to help with non-traditional situations like start-up and lower credit scores is the reason many of our customers come to eLease initially. Companies choose us again and again because of our customer service and ability to make a program work for them. If you’re looking for equipment leasing from a company who can work with your business and meet your needs, give us a call and we’ll work to make your equipment financing simple and quick.

Things To Consider When Choosing An Equipment Financing Company

Almost every business needs to acquire new equipment from time to time and more often than not businesses look into equipment leasing. I don't think anyone simply picks an equipment leasing company randomly but when it comes time for your business to work with an equipment financing company, what should you consider?

First, does your equipment financing company work with other businesses that are your same size and type. If you’re a small business and you try to work with a leasing company who only does business with large corporations, you may realize that you have to jump through many more hoops to get established with them. You may find yourself working through the process only to get part way through only to be told that you don’t have the type of reference or history they are looking for. Make sure that any leasing company you’re considering does business with companies that are like yours, whether that means in age, vertical, annual earnings, or number of employees. The process will go much more smoothly when the leasing company understands your type of business.

Second, does the dollar amount and type of the equipment you’re looking to finance fit in their normal size of equipment lease? Some leasing companies specialize in software leasing while other companies only write leases greater than $50,000. Make sure that the leasing company you’re considering working with can accommodate your needs within their normal programs. When you do that, you’ll be with a company who understands your business and who can offer you the best terms.

Third, are they easy to reach? Meaning, can you speak to a person if you have a question or issue? Some large equipment leasing companies make it nearly impossible to speak to a person when you need to. You don’t want to get lost in a phone tree or have to wait on hold for hours just to ask a question about your lease.

Lastly, what do other businesses say about them. Today it’s easy to find out what others think of a business. From the BBB to third party online review sites, find out what the general consensus is for that company so you don’t choose a company that will be hard to work with in the long run.

eLease works with small to medium sized businesses across the country. We have clients who have leased everything from kegs and brewery equipment to clients who have leased computers and office equipment and we’ve helped new businesses and established ones with their leasing needs for more than 20 years. Our team of financial specialists can work with your business to find the right lease for your company and it’s always easy to reach a human at eLease, so give us a call at 800-499-2577 today.

What is Creative Financing?

When business equipment leasing began it was primarily for office furnishings. As business environments grew and changed, equipment leasing companies changed what they leased and how leases were structured. Businesses today can and do lease things in addition to furnishings such as manufacturing equipment, specialized electronic components, computers, and even software. As a result, many different types of equipment financing evolved and that lead to what we now refer to as creative financing.

Who should consider Creative Financing?

·         Any business needing to acquire a variety of items that have different depreciation schedules

·         A fast growing company who already has multiple leases for existing equipment

·         A new business with little credit or equity

·         Any business owner who doesn’t feel the traditional three/five year fair market value or $1 buyout lease is the right solution for their current situation or need

What is Creative Financing?

Creative financing uses a variety of methods to acquire equipment while using as little of your own money as possible. Sometimes creative financing includes a combination of a traditional equipment lease(s) plus other methods. Sometimes a second small loan is obtained to essentially financing 100% of the equipment. Other creative financing methods include long-term financing and working capital loans. Some companies utilize non-financing methods, such as crowdfunding, as part of their startup costs. It is not unusual for a new business to utilize creative financing to help them get started.

Your financial specialist or leasing company can help you work through best methods that you qualify for in order to acquire the equipment your business needs. You may find that the best method is actually a combination of types of leases and loans. Once you and your financing company have come to an agreement on the type or types of financing you’ll be using, it’s always a good idea to speak with your accountant to make sure that the methods being used will best benefit you at tax time.

Creative financing isn’t illegal or a way to hide assets, it’s just one of the ways eLease has helped thousands of businesses since 1995 with their equipment acquisitions. We’ve been working with our customers to help them find the best solution through different types of business equipment leasing. If you are a business owner looking for options for leasing software, office equipment or furnishing, let the team at eLease help you today. Give us a call or download our easy application.

Equipment Leasing For Start-ups Is Possible

Some business grow from a small one person endeavor like those we talked about who market on Edsy while others begin because someone leaves an established company because they believe they can do it better. Being a startup business, no matter how you begin, has many challenges and one of the biggest can be equipment leasing or financing. Today we’d like to share two success stories about our ability to approve equipment leasing for two new businesses.