Overview
Here are 9 reasons why businesses acquiring technology should consider leasing:
1. Sustain Your Competitive Edge
Your business – like most – changes almost daily. New competitors, new market forces, new financial strains, new organizational structures all add up to a need for flexibility. When you select new technology, you wonder if it will be replaced by a faster, more powerful alternative next year, or even next month. Leasing your equipment avoids the risks of ownership because you pay only for the use of the equipment. When your lease expires, you can buy the equipment, trade it in for the latest technology, or simply walk away (depending on the type of lease you choose). You’re putting a technological “safety net” in place, so your company’s competitive edge is never dulled by the process of moving up to faster, larger, or different equipment.
2. Conserve Your Capital
Leasing lets you keep capital free for investment or other business expenses instead of tying it up in fixed assets. Profits from these investments offset the cost of the lease – you don’t have to own an asset to make money using it.
3. Generate Profits
Reinvest the cash you conserve into inventory or a new marketing promotion – investments that can bring real profits to your business.
4. Preserve Existing Credit Lines
Leasing gives you a new source of credit for present and future needs, while your existing bank lines remain intact for other uses.
5. 100% Financing
Unlike bank loans, leasing means no down payment and no required compensating balances in most cases. Leasing lets you finance the cost of the equipment, plus installation, maintenance, taxes, shipping charges, and even software.
6. Tax Advantages
Leasing offers important tax benefits that reduce the cost of obtaining equipment. Depending on the type of lease you choose, you may be able to write off the entire monthly payment as an operating expense or capitalize the outlay.
7. Budgeting Advantages
Leasing guarantees a fixed monthly lease payment for the length of the lease term, so it’s easy to forecast your equipment expenses. It also gives you the flexibility to obtain unplanned-for equipment – your operating budget may easily accommodate a monthly payment, but capital budgets often can’t be stretched to allow for an outright purchase.
8. Pay as You Go, Not Up Front
With leasing, you pay for equipment as you enjoy the benefits of using it.
9. Perfect Solution for Expanding Businesses
You deserve access to the latest equipment and technology. Leasing protects you from being locked into owning equipment that may not meet your future needs – and provides the flexibility to move up to the newest releases, features and functionality as they become available. Leasing is often the financing solution of choice for businesses that hesitate to buy equipment because they fear it will become obsolete before they can fully depreciate it.
*Be sure to consult your own accountant or tax advisor regarding the tax consequences of your leasing and financing transactions.
Our financing solutions, your enhanced success
U.S. Bank Equipment Finance offers a wide range of financial structures, knowledge, and industry experience that you can leverage to acquire Motorola solutions that are best for your business and your budget.
U.S. Bank Differentiators
- Consultative approach-Our Sales Reps work with you and your Motorola partner by
- designing a payment solution that works for your budget.
- Comprehensive coverage-U.S. Bank doesn't just finance the equipment cost, we cover other investments associated with the solution, including installation, training, and other
- upfront costs.
- One point of contact-Our Sales Reps support you throughout the entire lease sales cycle.
The Lease Sales Cycle
Monthly payment
Your U.S. Bank Sales Rep will structure a payment solution that meets your unique
budgetary needs.
Application
Our credit products allow for fast decisions, many times within a matter of hours
Documentation and P.O.
Your U.S. Bank Sales Rep will facilitate the document preparation process and deliver
the package via email or electronically. Upon receipt of signed documents, U.S. Bank
issues a purchase order to your Motorola product supplier for shipment.
Funding
Upon your acceptance of the equipment, or other commencement arrangement, we will
fund your supplier and begin the financing.
Why Lease with U.S. Bank Equipment Finance?
U.S. Bank Equipment Finance helps businesses and government customers acquire needed Motorola equipment and technology. Plus leasing is a convenient payment solution that can be customized to meet your financial needs.
Financing with U.S. Bank helps Motorola customers
- Avoid obsolescence-refresh and maintain use of the latest technology
- Budget and control costs with a fixed monthly expense and little or no upfront costs
- Improve or establish an asset refresh cycle
Flexibility
- We offer 100% financing on large and small transactions, competitive pricing, a wide variety of lease and loan terms structured to maximize cash flow and payment flexibility.
- This can all be done quickly and easily with fast approvals, minimal documentation and prompt product delivery.
Preservation of credit and working capital
Conserve lines of credit and acquire your Motorola technology without a major cash
outlay. Leasing doesn't tie up your line of credit. Rather, it gives you more capital at
your disposal when you need it.
Experience
The experienced Motorola finance professionals at U.S. Bank provide innovative, sound
guidance and tailored solutions backed by the stability of the fifth largest bank in the
United States.
Committed to technology finance for the long term
Comprehensive Business Overview
U.S. Bank National Association
U.S. Bank Equipment Finance (USBEF) is a division of U.S. Bank National Association,
the 5th largest commercial bank in America, founded in 1863 with assets of more than
$482 billion. U.S. Bank has been named one of the World's Most Ethical Companies
for the ninth consecutive year by the Ethisphere Institute, a global leader
in defining and advancing the standards of ethical business practices. For the 11 th year
in a row, U.S. Bank was named #1 in Fortune's World's Most Admired Companies
for super-regional banks, ranking first in 8 of 9 categories. U.S. Bank is proud to be the
chosen banking partner of 90% of Fortune 1000 companies.
U.S. Bank Equipment Finance (USBEF)
U.S. Bank Equipment Finance (USBEF) is a division of U.S. Bank National Association.
With $11.6 billion in assets, USBEF has been providing equipment financing to
commercial customers for 50+ years, originating approximately $4 billion in new leases
and loans annually. USBEF has both direct and vendor finance businesses and
employs 834 people today.
FAQ’s About Leasing
Q. Isn’t it cheaper for me to pay cash?
A. When you purchase equipment, there is a loss in the earning power of that up-front cash payment. For example, if the net profit on working capital is 15%, then you lose 15% a year. Leasing gives you the use of your money and the use of the equipment you need – so you can pay for the equipment out of earnings over time rather than put up equity capital all at once.
Q. Isn’t it better to own equipment?
A. Use of equipment, not ownership, produces profit. It is usually more economical to lease equipment and use your cash for other needs. Depending on the type of lease you choose, you can either purchase the equipment, or return it and lease more updated equipment, at the end of your lease term.
Q. What is the fair market value purchase option going to be?
A. The fair market value of the equipment will be determined by the market. If an agreement between the lessee and the lessor cannot be reached regarding market price, then an independent appraisal will be used to determine the amount. A fair market value lease option offers the lowest monthly payment, payments that are tax deductible as an operating expense, and a flexible purchase option at the end of the lease. “Fair market value” is just that – the price for which the equipment could be rented or sold in a transaction between unrelated parties.
Q. Why is it “fair market value” instead of a specific, predetermined amount?
A. The IRS and equivalent organizations in other countries have certain guidelines for a true lease, and one of the stipulations is that it must contain a fair market value purchase option. If the purchase option were guaranteed, your monthly payments would not be a fully tax deductible expense.
Q. Who pays the taxes?
A. The lessee is responsible for all taxes, but the actual payment to the taxing authority is made by the lessor, who is reimbursed by the lessee (you).
Q. Can I put additional equipment on my existing lease?
A. Yes. Once you’ve signed one contract, additional equipment can be added easily.
Q. Is the lease cancelable?
A. No, a lease is a non-cancelable contract.
Contact us with any questions you may have about financing.
