Leasing Copiers, Printers & Office Tools

What Is Lease Financing?

The principal difference between lease and loan financing is that a funding company purchases the asset you require and then 'leases' the equipment to you on a monthly basis for a predetermined period of time. There are many different types of leases available, each designed to fit different needs or tax situations. It is always reccommended that you consult your accountant to determine the most suitable type of lease or even if leasing is best for you.

What are the advantages of leasing?

Lower monthly fees
Control over your cash flows and working capital
Spread the sales tax over the lease period (not paid all at once)
Improve your financial ratios
Obtain the use of a piece of equipment for a short term contract
Protection from equipment devaluation or obsolescence
At the end of the lease period, you return the equipment to us unless negotiated options have been arranged

Types of Leases:

Stretch Lease - The lowest monthly payments and maximum tax benefits are available with Stretch Lease financing. This program is especially attractive if you want to take advantage of lower payments and think you may want a purchase option in the middle of their lease term. For example, if you are approved for a lease over 24 months, our leasing partners may take the approved value and spread it - or stretch it over 27 months. This has a direct impact of lowering you monthly payments.

Residual Lease - We can customize a Residual Lease, so that you can purchase the equipment at a pre-set residual amount, (which is usually $10 plus taxes) at the expiry of the lease. Periodic payments are calculated based on the residual value, and the expectation that you will want to own the equipment at the end of the lease. Monthly payments are therefore often higher with a Residual Lease, which helps you have a very low buy-out. Care must be taken with this type of lease as they are not always tax deductable.

FMV (Fair Market Value) Lease - We recommend this deal if you want to use the equipment over the expected life of the equipment and maximum flexibility and options at the end of the lease term. FMV leases are offered for 2-5 year terms and provide an expiry option for Fair Market Value to be determined at the end of the term. At the end of the lease you have the option to:

Return the equipment to us
Buy the equipment at fair market value
Continue leasing the equipment on a month-to-month basis

CUSTOMER BENEFITS OF LEASING

Financial Considerations
Leasing has a significant positive impact on cash flows and working capital. Leasing equipment frees up your cash resources to be used for other purposes. In addition, the lease term can be structured to cover the equipment's useful life. This is especially important as you are able to tie the equipment's earning potential (your receivables), to its cost (your payables).
Accounting Advantages/Tax Benefits
If your business is growing so quickly that it's putting a strain on your cash flow, leasing equipment rather than purchasing equipment often makes good business sense.
- Leasing can introduce flexibility into your financial statements. Most leases will allow you to write off the full payment. The cost of the equipment will not appear on your balance sheet and therefore will positively impact your balance sheet ratios (including capital tax charge in certain cases).
- Leasing will also spread your sales tax as the sales tax is charged on lease payment and not all at once, as it is if you purchased the equipment.
- Leasing can provide the flexibility to control the turnover and cost of your equipment. For example, you can respond to market upswings by:
  - Quickly acquiring new equipment when it is needed
  - Getting a lease approved in hours (banks often take days - or weeks)
  - Upgrading equipment by returning it and trading up
  - Making small monthly payments rather than take a loan or have a huge cash outlay.

Please Contact Ribbon Encore for more information.