Leasing
All products we distribute have leasing capabilities that can be structured to suite a wide range of needs
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A Complete Solution
A typical lease covers as much as 110% of any C-Bourne equipment costs. We also cover the delivery, installation and other soft costs in addition to the equipment itself. We can do this for both Canadian and US companies. You can expect approval within couple weeks. Our typical leases only require first and last payment in advance although there are other options including seasonal and delay payments.
The leasing company won't bother you for the next 2-5 years as long as you make your payments. At the end of that time, just return the equipment (with on further obligation) and upgrade to new equipment, or the leasing company will sell the equipment for its end-of-term option.
Leasing agreements are contingent on the corporation’s credit & financial situation, both Canadian and US companies can expect approval within a week for a wide range of options. The most popular being a 5-year lease with up to 110% financing with 10% buy out with first and last month payments to get production underway.
Leasing Benefits
People choose to lease for a wide range of reasons. Thanks to its flexibility, leasing can help meet a variety of goals that business might have. Below are some of the more popular reasons cited for choosing leasing to support the aquisition of C-Bourne products.
Project costs more accurately
Leasing provides known payments over a specified period. Leasing helps take the guesswork out of budgeting.
Pay as the cash flows
Is your business seasonal; your business cycle predictable? Why not pay for that new equipment when it is paying for itself. Leasing is flexible because there is the option of customized lease payment schedules also known as a Seasonal Lease.
Fixed lease payments
Fixed payments enable a lessee to more accurately predict equipment costs and cash needs.
Overcome Budget Limitations
Often a business's budget only allows the purchase of what they absolutely require, not what they really need.
Conserve Credit Lines
With leasing, you can get the camp equipment you need now without disturbing your present bank credit lines. Preserving your bank lines for other possible uses means the same thing to you as expanding available credit.
Possible tax advantages
Lease payments are often treated as fully deductible expenses. This may mean a more rapid write off to you. Because the lease term is generally shorter than the depreciable life, payments can be expensed in a shorter duration.
Competitive Advantage
Leasing can help grow your business.
Virtually 110% Financing
Practically any other financing demands a substantial down payment, deposit or compensating bank balance. By leasing, you can quickly acquire use of the camp equipment you want without major cash outlay.
Leasing makes business sense and tax sense
Most businesses will write off 100% of their lease expenses. Bank loans for equipment must be capitalized and only gradually depreciated over a period of 5,6,7 or more years! Operating leases can effectively accelerate those write-offs even faster, putting cash into your pocket sooner.
Is that "Prime Rate" offer a good deal?
Is it 7% or 17%? Let's say for this example that the prime rate is 5.5% and your bank has offered you that "plus 1.5". When you compute the real yield on that 7% loan offer, you will find it is actually a 17% loan. (Because you're paying interest on 100% of the loan amount, but have only received 80% of the money from the bank, the rest is your own compensating balance being "loaned" back to you.) Using the same formula, a 10% compensating balance brings the bank's effective loan rate down to 11.7%. Anyway you cut it; it's still a far cry from 7%!
Leasing vs Bank
Bank line rates flow with interest rates
Lease payments are guaranteed fixed for the term of the lease
Short-term rates are very low now - where will they "float" to during the next 12,18 or 24 months?
What effect will a new loan have on the cash available under your business line, for special business opportunities, emergencies, etc? ( In most cases your total access to funds will be reduced.)
Is the bank actually offering a credit line or a term loan? There are many key differences.
Banks may require that credit lines be brought to zero at least once every 12 months. They want to reserve the option to call the line should your industry start to "go south," or if the regional economy, or your business prospects start to "soften" (in their sole opinion).
Banks typically do not fund more than 75-80% of the net equipment cost.
Our lease can cover as much as 110% of the cost as, unlike banks, we will include shipping, installation, training, initial maintenance and other "soft" costs.
Banks are far more restrictive than leasing companies about the equipment they will finance.
Many banks will only do "hard" collateral ( machinery, etc.)
Our funding sources will lease all kinds of business or commercial equipment, even 100% software transactions.
Most banks will not even consider "used" equipment. We do it all the time!
In many cases the bank will place a "blanket lien" on all of your assets.
The lease equipment is secured only. Nothing else is encumbered. None of your financial flexibility will be compromised.
Keep in mind that if the bank were to decline to renew your line ( at any point in the term ) that those "blanket liens" would still be in effect, blocking you attempt to use your own assets as collateral for any new ( replacement ) funding.
There are absolutely no financial reporting requirements with a lease.
The bank will likely require you to cross - collateralize any new obligation with all of the accounts you maintain at that institution - personal checking, savings, trusts, etc. ( This is often buried in the fine print.)
Your lease is a freestanding obligation
Even if you are not signing "personally" for this obligation with your bank, you may find that any previously signed, personal guarantee is deemed "continuing and unconditional" vis-a-vis all new obligations at the same institution.
Are you a "key customer"? That may sound flattering, but it usually means that the bank is extending its offer based on your "entire banking relationship" - your other accounts, the other balances that you maintain and the service fees/income that you generate for them.
It also means that you are tied to that bank exclusively for the term of the loan. If you move accounts and /or services, your rates will almost certainly jump - way up. Not sure? Ask them specifically.
Are bank - mandated "compensating balances" your best use of your own cash and operating capital? Where else could those funds be working (earning) for you, if they were not "committed" to the bank line?
The bank can call your loan! There is probably a clause that permits the bank to call your loan if they feel "uncomfortable" about the prospects for your industry, without regard to your payment history. ( This too is often buried in the fine print. Check it out.)
Are you ready to pay these very high prices...for those "very low rates"?
Most customers find that they are being asked to pay a very high price for those seemingly "very low rates". Operating & financial restrictions, capital "frozen" as unproductive "compensating balances", business assets encumbered, future foat risk, reduced availabilty of their own critical business credit lines, etc.,etc.
Leasing has become a trillion dollar industry in North America right alongside the commercial banking industry and for good reason. The points we have shown you on these pages are just some of the many reasons why businesses, from giant multi-nationals to local "mom & pops", have decided to "just say no" to their bankers overtures and have chosen to lease instead.