Available Equipment Financing[cite::2400::cite] Options
- Capital or Finance Leases (also often referred to as $1 buyout leases): In a capital lease, the Lessee has the option to purchase the equipment at the end of the lease for a "bargain" price. A capital lease is one in which the Lessee remains the owner of the equipment for GAAP accounting purposes and for tax purposes.. Payments under a capital lease typically fully amortize an implied loan in the amount of the purchase price the equipment.
- Fair Market Value (FMV) Leases: In an FMV lease, the Lessee has the option to purchase the equipment at the end of the lease for the then fair market value. FMV structures give the Lessee the potential ability to account for the lease under GAAP on an off-balance-sheet basis.. Payments under an FMV lease amortize less than the full purchase amount of the equipment, with the Lessee maintaining the option to pay a balloon payment after the lease matures in order to acquire the equipment.
- Operating Leases: Operating Lease classification is determined by the criteria set forth in FASB 13. In an operating lease, the Lessee has the option to purchase the equipment at the end of the lease for a pre-specified balloon price that is sufficiently high to allow the lease to meet the GAAP criteria to be classified as an operating lease. Operating leases are accounted for by lessees as off-balance-sheet instruments. No asset is recorded, and no corresponding liability is recorded either.
- Tax Leases: In addition to the above products, we will consider tax-driven lease products on a case-by-case basis. Many of the companies seeking these tax-driven leases tend to have low income tax liabilities.. For this reason, they enter into a lease structure that allows Amegy Equipment Funding Group, as Lessor, to take depreciation on the equipment. Amegy Bank, in turn, is expected to return the benefits derived from this depreciation tax shield in the form of lower lease payments.
- Auto Loan[cite::2400::cite]: Expand your business with the purchase of a new vehicle while minimizing your cash expense upfront.
Features and Benefits
- Competitive pricing and creative structures
- The capacity to finance a broad range of equipment types;
- Equipment Lease lines of credit
- Transactions ranging from $100,000 to excess of $10 million
- Preserves Cash: You pay only for the use of the asset, not for the ownership. This avoids tying up capital in assets.
- 100% Financing: You receive 100% financing, eliminating the need for down payment.
- Cash Flow/Budgeting: You receive longer term, fixed payments and potentially lower payments.
- Alternate Source of Capital: Your existing bank lines of credit are not impacted.
- Off-balance-sheet Source of Funds: You can improve ROE, ROA and many other financial rations by utilizing equipment lease financing instead of borrowing.
- Tax Advantages: Lease payments may be expensed depending on the structures of financing for each credit. Check with your tax advisor.
- Avoids Capital Budgeting Constraints: You can acquire needed equipment outside the capital budget. Lease payments usually are paid out of the operating budget.