eLease Equipment Leasing

Why are so many businesses installing surveillance systems in their offices? The main reason is TO SAVE MONEY. Companies that invest in surveillance equipment are likely to save money in a number of ways:
Insurance (workers comp) - Every year American businesses pay out millions if not billions of dollars to their employees for workers compensation for accidents that aren’t work related. Employment law in the United States heavily favors the employee and for good reason. But without a way to prove your employee wasn’t hurt on the job, businesses are extremely vulnerable to abuses of the system. By installing surveillance cameras companies can monitor their stores, production lines or any work place and have photographic evidence of specific injuries or accidents. Additionally, by seeing accidents first hand, business owners can take preventative measures to minimize future injuries.

Theft - All businesses have problems with theft from grocery stores to banks. By installing surveillance cameras not only can you abate theft from outsiders, but you can curb internal theft.

Productivity - Wonder what your employees are doing all day? With surveillance cameras you can track productivity of your workers and work on improving the efficiency of your business.

The other reason companies get a surveillance system for their business is to have PEACE OF MIND.

Internet Viewable - Surveillance systems today allow the business owner to
view their business operations from another location. The owner could be on a business trip in China and still keep an eye on his business.

Multiple Locations - Some business owners have more than one location and can only be present at one location at a time. With security cameras, owners can monitor locations simultaneously.

No how do business owners pay for their new surveillance system?

There are many different ways to pay for equipment for your business. The first and most obvious is paying cash. Not all business owners have the budget to pay cash for a surveillance system. This brings us to financing:

Financing your security system is a great way to acquire your equipment without having to seriously impact your cash flow. Traditional loans with banks can be good when considering an interest rate. You will typically have to put down anywhere from 10%– 20%. Along with the hefty down payment, banks place a blanket lien on all company assets.

What if a business owner could get that brand new surveillance system to save money in the long run and for peace of mind at the same time not giving up interest in assets or having to put down a bunch of money? Equipment leasing is the solution. Equipment leasing is a way to finance your surveillance system 100% only having to put down the first and last payment upfront. The leasing company only holds a lien on the particular equipment you are acquiring not all assets of the company.

The top 5 reasons to lease the new surveillance system:

1. Cash Flow - Making monthly payments are much easier than coming out of pocket thousands of dollars. Let the equipment pay for itself instead of waiting years before you break-even.
2. Low Down Payment (100% financing) - Paying your first and last payment upfront is much easier than having to come out of pocket 10% or 20% for a traditional loan from a bank.
3. Service contracts for the surveillance system can be bundled into a lease so you have one low monthly payment.
4. Upgrading - Adding equipment to your lease agreement is extremely easy. All it takes is a one-page contract added to the original agreement.
5. Leasing allows “Up Selling” - Having a leasing company pay for equipment allows customers to get EVERYTHING that they need without having to take certain items out because they can not afford them. Adding additional equipment to the lease will not change the monthly payment significantly allowing it to stay within customers’ budget.

A small freight forwarding company in South Florida needed a new surveillance system that cost $65,000 for their facility.  Not only were able to structure a 60-month term to fit their budget we fund their vendor 50%, up front, to get started on the installation. Just another example of how leasing can not only make your business grow but also run more efficiently.

The vendor and customer were thrilled but not as happy as Obama who locked up the delegates for the nomination of the Democratic Party.  eLease Equipment Leasing is a non-partisan company and are proud to say the Democratic State Committee of Connecticut is one of our customers.  Leasing and equipment finance is good for America and eLease is good for American business.

November is coming around the corner, by then we will know who our new President will be, our new customer will using their new equipment to grow and hopefully their won’t be $4.00 gas at the pump.  The customer also said he would help the voters in South Florida with the voting machines!  Just Kidding.  What a great country!   Congrats Mr. Obama.

Tax time is a great reminder of why we lease equipment for our customers. Depending on how you setup your leases you can write off your payment as an expense for your business.  Have questions about the different types of leases out there? Give us a call or check out this basic overview Lease Types.

The idea is to have your company running like a fine tuned machine. You are only spending money on what is making you money. Also it is scalable, so the more equipment you have the more money you make. Equipment leasing makes it much easier to plan and clearly see equipment is making money for your company.

With large capital investments it is hard to track how profitable those investments are for your business. But when you lease, you can match the money payments to the monthly profits.

Taxes can be a stressful time for companies. It is one of the only time small companies get a chance to look at their year in review and plan for follow years. Take advantage of the perspective and let 2008 be a high growth year from your company.

Thank goodness for mothers everywhere.  There is never a day that I don’t use the wisdom passed on from my parents.  My mother always told me to respect my elders.  In our business we seldom get to finance equipment that can truly lift the human spirit.  We had such an opportunity when a repeat customer who we financed software for last year.    The customer called us and asked if we could finance 8 digital pianos for their assisted living facility.  Most facilities have pianos but these pianos have a digital CD Player that plays requests.

It was the first such request we have ever received.  I have financed all kinds of different equipment including: zambonis and a fence for a tiger refuge in Texas.  When our customers have a need for equipment for their business it is our duty to do everything we can to get them their equipment.  We financed the pianos for the customer and it was music to their ears.  They were surprised and elated eLease were able to lease the peculiar equipment they needed.

When I got in the car that evening to go home I called my mother who worked in the hospice industry for the state of New Jersey as a medical investigator and told her about the customer.  She expressed to me how important music is for people in assisted living facilities. She wished more facilities used these types of technology to help their residents become more active and to enhance residence’s spiritual well being.   She also said that most pianos sit dormant without anyone who knows how to play them. The digital piano allows people to experience a live piano without having to know how to play the piano.

A lot of times mom doesn’t understand what eLease actually does sometimes.  It was a pleasure to share a real world example with her and make a difference for their guests.  I am proud we are able to provide a service so many will enjoy!  Mom was right.

Leap Year –February 29, 2008

Just one day.  What’s the big deal right?  With all the talk of doom and gloom everywhere in the news sometimes it can be hard to be an optimist.  However being an entrepreneur you don’t have that option.  In the world of the entrepreneur the glass is always half full.   How many times do we wish we had an extra day in the week or a day in the month to create new opportunities?  They should call Leap Year Entrepreneur Day because it is the only day we have to really catch up.  I for one appreciate the day to help wrap up another request from our customers.

In fact, we funded an entrepreneur in Texas that spent his Leap Year Day flying to California to pick up his new 2006 Cement Truck.  Upon his instructions we wired his vendor $173,500 by 10:00 AM and he started his drive back to Texas.  I bet he appreciated the extra day to get back to see his family.

When many business owners lease for the first time it changes forever the way they look at equipment, budgets and financing. It is simple to spot a potential leasing fanatic. All it takes it a passionate entrepreneur and a business model with growth potential.

Here is how it works: a business owner has a goal they are focused on achieving. Most good business owners make detailed budgets and plans to achieve their goals. Experienced business owners have learned to tie their expectations to their timelines and budgets; they realize that growth usually takes longer then expected.

Leasing frees your business from constraining equipment budgets. It speeds up your growth cycle significantly. The transition from leasing customer to leasing fanatic occurs once the business model is proven and the company has enhanced profits directly resulting from the equipment they leased. The first month that a business owner sees on their books how much more they are making with their new equipment in proportion to how much money they are spending on their equipment is when they fully appreciate the value of leasing.

If it worked once well, lets try it again. Many businesses just need equipment to grow. By leasing equipment they can dramatically increase what they can acquire in short period of time. With one lease under their belt business, owners come back to elease.com to finance additional equipment to continue their growth.

Networking equipment leasing is a good example of an industry that can create some leasing fanatics. For example, if you are an ISP (Internet Service Provider) you need computers to sell web site space to your clients. Presumably your clients are paying you monthly for your service so you can apply those monthly payments directly to a lease payment for a new machine and rapidly expand your business.

eLease has countless business with dozens of leases with us and they are always looking for more. It is one of the most satisfying parts of my job to see a company realizing the benefits of leasing to grow their dreams.

Sometimes examples help illustrate abstract concepts like leasing. We are working with a film production company that has about 4 years in business and is trying to expand. The economics of their business provides a clear example of how leasing can help any business grow.

In the video production industry equipment doesn’t come cheap. Professional cameras range from tens of thousand of dollars to hundreds of thousands of dollars and with each piece of equipment there are necessary accessories which always end up costing thousands of dollars. And that is just the beginning. You need professional monitors, decks, expensive editing software and lighting packages.

This particular client has several projects happening at the same time and they wanted to increase their productivity by expanding their editing capabilities. They didn’t have enough capital to purchase the editing equipment required and were at a standstill.

When I ran the numbers for the client it made their decision easy. The equipment cost about 10,000 and it would take them months, if not years, to have enough money to purchase the equipment with revenues from the business. Their clients usually pay 60 days after the work is completed and they had a limited amount of work they could do given their existing infrastructure.

These clients bill their customers about $750 a day for editing and were not able to bill more because they only had one editing system to work on. You can lease $10,000 of equipment for as low as 225 dollars a month, far less than one day of editing. The numbers made their decision easy. By leasing the editing equipment they can spend less than half a day a month paying for their system and the rest of the month is profit to the company. The question for the business owner was clear: will you have use for the editing system for more than one day a month moving forward. The answer was naturally yes and leasing the editing system allowed them to remove a bottleneck of their production line and expand their business exponentially.

People occasionally ask if eLease.com can finance software and the answer is yes. As long as the software is coming from a manufacturer we can verify and the software is critical to your business.   eLease works with over 100 software firms to provide leasing services to their customers.

It is hard for a lot of business owners to wrap their minds around the concept of leasing software since it is not a physical piece of equipment. For leasing companies, software is riskier investment because there is nothing to resell if a company is unable to make its payments.

Every year CFOs find a larger and larger portion of their budget being allocated for software. It is an integral part of doing business these days and can be quite costly. Leasing or financing software is worth considering because it allows businesses to get the full versions of certain programs they would otherwise not be able afford. eLease.com can also finance the support and annual contracts to sweeten the deal.   With products like Great Plains software eLease.com is able to finance specific modules with just a one-page addendum.

For example, eLease.com just funded a lease for a web services company for $30,000 of Foundry Network equipment. This particular company has been in business for 4 years and wanted to structure their financing for 24 months with a Fair Market Value Option buyout.  We were able to get the software funded in just 2 days. This is the 12 lease we have funded for this customer who continues to grow and use leasing and financing to build their business.

Why do I like the small lease for the small business?   Today’s economy is all about impressive big numbers. Everywhere you turn there is always someone throwing around a big number. What I think some people forget is that a lot of smaller #’s create those bigger numbers.

We funded a transaction for an entrepreneur today who had been using an old telephone system for over 2 years that was completed outdated. Like most business owners, he was concerned about cash flow. We financed his $3,595.00 system the same day with payment of $126.00 per month on our Equipment Finance Agreement program.

The business was very small but had big plans and I like to think we are part of his future success.

The Definition of the Equipment Finance Agreement

An EFA is a fixed-term obligation with equal monthly payments, where the borrower is the owner of the equipment and the lender has a security interest in the equipment. The borrower deducts as a business expense both the depreciation on the equipment and the interest portion of the monthly payment.    A lessor may use an EFA, and act as the lender, when the borrower has already taken delivery of, and has paid for, the equipment.

We started offering EFAs in 2005 and we have had tremendous success with them over the last 2 years. I consider the EFA as a $1.00 lease on steroids because it is giving you the same tax benefits as a normal lease but has more flexibly to pay it off early. When we finance equipment for our office we use this type of financing.

Let us know if you have any questions on this type of agreement.

Every company needs a limousine right? Well, maybe not every company but a country club that is trying to become a destination nightclub certainly does. In general, a great time to lease is when you are a successful business that has hit an earnings plateau requiring major capital expenditures to move in new markets. If your company has a steady flow of business coming in you don’t want to burden that thriving part of your company with huge equipment costs for an untested venture. By leasing equipment rather than purchasing it you can insure your existing business is not disrupted by expansion. In other words, leasing lowers your risk and increases your chance of success.

I was excited to help this business grow but when I processed their equipment leasing application I ran into a common problem: exposure. Not the exposure that you are thinking about, leasing exposure.

What is exposure and how can in impact my business?

All leasing companies set a limit on the amount of money they will loan a particular company based on financial criteria that is often referred to as exposure. Once this limit is established is easy to add equipment onto existing leases or start new leases as long as the “total exposure” is still under the set limit.

The country club was in good financial standing. In fact, eLease had already funded a lease a few months earlier for their new management software. While the new lease request for the limousine was less than the original lease for management software the “total exposure” of both the management software and the limousine was higher than the limit that eLease had set for the company.

Computer based scoring systems that run most leasing companies would have declined the country club instantly for having, “too much exposure.” This highlights two important things to know about leasing. First, work with a leasing company that has a real person looking at every deal. Secondly, find a salesperson that has some equipment leasing experience so they know how to work around some of the common leasing hang-ups.

I was able to prove that the country club had already grown from the time eLease had financed their management software and was continuing to expand. This growth dictated a revaluating the “exposure” limit. When the companies “exposure” limit was adjusted it was increased by enough to lease the limousine. The deal got done, the company is doing well in their new endeavor; all part of a days work.