BUSINESS MANAGEMENT
www.landscapeirrigation.com Landscape and Irrigation October 2015 37
LI
William G. Sutton, CAE, is president
and CEO of the Equipment Leasing and
Finance Association (ELFA), the trade
association that represents companies
in the $903-billion equipment finance
sector, which includes financial services
companies and manufacturers engaged
in financing capital goods. ELFA has
been equipping business for success
for more than 50 years. For more information, visit www.
ELFAOnline.org. Follow ELFA on Twitter @elfaonline.
© Equipment Leasing and Finance Association 2014.
Reprinted with permission.
8. How flexible does your business want the financing
terms to be? A lease can provide greater flexibility, since it can
be structured for a variety of contingencies, whereas with a
loan, flexibility is subject to the lender's rules. If your business
has continuing use for the equipment at lease termination,
extended rentals, purchase options, trade-ups and return options
are available. The lease term allows your business to match all
expenses to the term of the equipment's use, including income
tax expense, book expense and cash expense. Most importantly,
as mentioned previously, the expense stops when the equipment
is no longer required.
9. Do you anticipate the need for additional equipment
under your financing agreement? If your business is planning
for growth, you can enter into a master lease that will allow
you to acquire multiple pieces of equipment under multiple
schedules with the same basic terms and conditions. This
provides greater convenience and flexibility than a conditional
loan contract, which must be renegotiated for additional
equipment acquisitions.
10. Who can help me evaluate what's best for my business?
Whether you finance equipment through a lease or loan, each
has its advantages. When making the decision between a lease
and a loan, it is highly recommended that you consult with
your accounting professional, as well as draw on the resources
of your equipment financing provider to enable you to secure
the best possible terms for your lease and/or loan.
These are some of the key considerations that should go
into the lease versus loan decision-making process. For a
lease/loan comparison and online tools, visit www.equipment
financeadvantage.org/ef101/llc.cfm.
