Whether you are a business executive looking to invest in new equipment or a vendor seeking financing options for your clients, you can leverage flexible financing through First American to achieve your goals.
While the majority of U.S. businesses use financing for equipment and software instead of purchasing them outright, many misconceptions still exist. Let’s take a fresh look at leasing by exploring some of these common myths.
Many of the most profitable, cash-flush companies use leasing as a strategic tool to increase liquidity, invest capital in other high-return initiatives, and take advantage of tax benefits.
Companies who work with their primary bank for capital projects often explore alternative funding relationships to diversify their funding sources, avoid covenants and fees, and ultimately complement their banking relationship. Leasing is typically less complicated, more predictable, and faster than a commercial banking transaction.
In the current economic environment, preserving cash by financing your capital equipment allows you to benefit from high-yielding deposit rates—reducing your net cost of borrowing. Investing in a competitively priced money market or CD account while financing your CapEx needs can provide your organization with a net borrowing rate of 3-4%.
While traditional methods of financing can be bogged down with slow approval processes, red tape, and lots of paperwork, modern lenders make the leasing process simple, streamlined, and fast. With straightforward documentation, digital signatures and invoicing, and hands-on project managers, you can get the equipment you need without unnecessary delay.
Businesses can use leasing for a range of project costs and asset types—whether it is a one-time $100,000 purchase or an ongoing project totaling $30MM+. You can bundle smaller, soft costs into your leases as well, including construction and installation fees, software licensing, and more.
With custom structures, terms, and payment options, leasing gives you the flexibility to design financing agreements that meet your specific and unique business objectives. And unlike traditional bank offerings, leasing allows you to mitigate risk and take advantage of fixed-rate funds without covenants or blanket liens.
Leading equipment finance companies offer end-of-lease management services that make returning equipment easy, quick, and secure. These often include convenient features such as pack and ship services (remote or onsite), nationwide return locations, data sanitization, value recovery, and more.
Fixed assets and software purchases made over the last 12 months can be reimbursed for 100% of the original purchase price, enabling you to remain nimble and reinvest the cash in your business.