Payment Terms • Lease: Leases involve a fixed payment of rent. • Loan: Banks loan long-term money on a floating or variable rate. This places the rate risk on you. Equipment Ownership • Lease: Financing Company owns the title to the equipment and customer has option to buy, extend lease, or upgrade and return equipment. • Loan: Borrower owns the title to the equipment and cannot return or upgrade at end of loan term. Down Payment • Lease: Typically, no down payment is required. • Loan: Bank can require an upfront payment (20%). Obsolescence Risk • Lease: Financing Company assumes risk of the outdated equipment since customer can return equipment and upgrade at end of lease. • Loan: Borrower bears risk of the equipment and devaluation due to new technology. Collateral Requirements • Lease: The equipment serves as the collateral for the transaction. If payments are missed, equipment can be seized in event of a default. • Loan: Business loan may require customer to pledge current or fixed assets for collateral. Assets can be seized in event of a default. Eligible Assets • Lease: This product can finance equipment, software, and services (installation, training, etc.) • Loan: This product pays for capital needs including sales finance, inventory finance, and business expansion. Tax Benefits • Lease: Lease Payments may be 100% deductible or may be a form of accelerated depreciation depending upon the lease type. • Loan: As the equipment owner, your only tax advantage is depreciation and the loan’s interest. Lease vs. Loan Use the right combination to acquire equipment for your business Mark Johnson (O) 800.234.9693 • (M) 949.243.2350 [email protected] REDEFINING How You Offer Customer Finance Solutions • Follow us on

Lease vs. Loan - Americorp Financial€¦ · • Lease: Lease Payments may be 100% deductible or may be a form of accelerated depreciation depending upon the lease type. • Loan:

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Page 1: Lease vs. Loan - Americorp Financial€¦ · • Lease: Lease Payments may be 100% deductible or may be a form of accelerated depreciation depending upon the lease type. • Loan:

Payment Terms• Lease: Leases involve a fixed payment of rent.• Loan: Banks loan long-term money on a floating or variable rate. This places the rate risk on you.

Equipment Ownership• Lease: Financing Company owns the title to the equipment and customer has option to buy, extend lease, or upgrade and return equipment.• Loan: Borrower owns the title to the equipment and cannot return or upgrade at end of loan term.

Down Payment• Lease: Typically, no down payment is required.• Loan: Bank can require an upfront payment (20%).

Obsolescence Risk• Lease: Financing Company assumes risk of the outdated equipment since customer can return equipment and upgrade at end of lease.• Loan: Borrower bears risk of the equipment and devaluation due to new technology.

Collateral Requirements• Lease: The equipment serves as the collateral for the transaction. If payments are missed, equipment can be seized in event of a default.• Loan: Business loan may require customer to pledge current or fixed assets for collateral. Assets can be seized in event of a default.

Eligible Assets• Lease: This product can finance equipment, software, and services (installation, training, etc.)• Loan: This product pays for capital needs including sales finance, inventory finance, and business expansion.

Tax Benefits• Lease: Lease Payments may be 100% deductible or may be a form of accelerated depreciation depending upon the lease type.• Loan: As the equipment owner, your only tax advantage is depreciation and the loan’s interest.

Lease vs. LoanUse the right combination to acquire equipment for your business

Mark Johnson(O) 800.234.9693 • (M) 949.243.2350

[email protected]

REDEFINING How You Offer Customer Finance Solutions • Follow us on Social icon

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