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What are the Differences between a loan and a lease? |
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Loan |
Lease |
| Rates |
Rates are usually floating and based on Prime Rate or another similar index such as LIBOR. As the index fluctuates, your monthly payment changes with it. |
Payments are generally fixed for the life of the lease. Leasing can provide business owners peace of mind. Rates are currently low and will be locked in for the life of the lease. |
Amount
Financed |
Banks generally only lend a portion (60%-80%) of the equipment cost; exclusive of soft costs such as shipping, training, installation, etc. |
We are able to finance the complete equipment acquisition which will often include soft costs, shipping, installation, training and sales tax. Out-of-pocket costs are usually limited to the first and last month's investment. |
Extra
Costs |
Banks use fees to boost their rates of return on loans. These fees include application fees, origination fees, schedule fees, and funding fees. These fees are charged for expenses associated with approving and executing the loan application. |
With our leases there are no origination or application fees. Documentation fees are minimal, ranging from $99 to $250 depending on the transaction size. In general, leasing provides more control over fees. |
Available
Terms |
Banks tend to be somewhat less flexible than leasing companies. That's fine if you are looking for a standard term. But if you need more flexibility, you may be stuck with little or no options. |
In most cases, you have the option of choosing the term and the purchase option for your equipment lease. Custom terms can easily be arranged depending on your needs and financial outlook. |
Ease of
Application |
Regardless of the amount requested, most banks won't begin to review your credit until you supply a full financial package based on their specific regulations.
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Our business goal is convenience. We are completely service-oriented. We know that your time is precious therefore we offer lease programs up to $150,000 without requiring financials. In most cases, we can approve your equipment lease based solely on a complete application. |
| Speed |
Banks are slow credit decision makers. It can take weeks to prepare your request and bring it to the credit committee for review. |
We know that time is of the essence when it comes to equipment acquisition. Most of our approvals are issued within 4-6 Business Hours |
| Collateral |
Banks usually secure their loans by requiring additional collateral such as real estate, equipment, inventory, receivables or even your home. In fact, it is common practice for banks to file a blanket lien against all of your personal and/or company’s assets. |
The only collateral needed to finalize your lease is the equipment being leased. |
| Restrictive Covenants |
Bank loans often require that the borrower maintain certain minimum financial ratios and report them to the bank on a quarterly or semi-annual basis. If the borrower fails to maintain those ratios, the bank can call the loan. They can also place restrictions on or limit future borrowings from any institution. |
Leasing does not call for such restrictive covenants. |
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Loan |
Lease |
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Frequently Asked Questions |
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Cash |
Loan |
Lease |
Can I avoid a large
cash outlay? |
Responsible for 100% of Down Payment |
Often as much as 25% |
Often requires just first and last payment in advance |
How will it affect my
bank credit line? |
Impacts your balance sheet immediately |
Decreases credit line |
No money is borrowed |
How will it affect
my operating capital? |
Highest up-front costs |
Down Payment is most often required |
Low front-end costs |
What will my
payments be like? |
100% needed now |
Payments may rise with interest rates |
Fixed payments with tax benefits |
Can I upgrade/add
on easily? |
No |
Re-application often required |
Yes. Your lease can even be structured ahead of time to account for this option. |
Can I schedule
payments to match
my cash flow? |
No |
No |
Yes. Leasing provides various payment options that will mean the difference between growing your business or losing it. |
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Cash |
Loan |
Lease |
Lease Vs. Purchase FAQ
+1 206-217-5566 
+1 206 260 9091
1402 Third Avenue,
Suite 812,