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1) What is a lease?
A lease is a binding document where one party (the lessor) gives another party (the lessee) the exclusive right to use and possess its equipment for a specific period of time. The document spells out the terms in which the equipment is leased.
2) Who can lease?
Any Commercial, Municipal, Federal, Non-Profit, and Tribal entity can execute a lease. This also includes a Sole Proprietorship, Partnership, Corporation, or LLC.
3) What about start-up companies?
Start-up companies can reap the benefits of leasing as well. Rapid Solution Leasing, Inc. will consider all lease requests from companies in business for less than two full years. Approval will depend on the particulars of the company's situation, additional sources of income, industry experience and personal credit.
4) What can be leased?
Rapid Solutions lease programs allow our customers to lease virtually any piece of new or used equipment that is needed for a trade or business.
5) How long does it take to be approved?
Many of our leases only require a short online application for rapid approval. The Credit Manager will review the application and will call to discuss if anything additional is needed for processing. Once Rapid Solution Leasing, Inc. has received all required financials, approval is normally within 24-48 hours.
6) What dollar amount can be financed, and for what term?
Rapid Solutions Leasing, Inc. has a minimum equipment lease amount of $1,000, to in excess of $30,000,000. Typical terms are 12 - 60 months, with some as long as 84 months. We also have numerous payment options available such as seasonal, quarterly, or skip payments. We are committed to providing a structure that will help your business succeed.
7) What are a lessee's options at the end of a lease?
Rapid Solution Leasing, Inc. offers various lease options to fit our customers' needs, most commonly used are:
• Capital Lease ($1 Buyout)
This option is ideal for the lessee who wishes to own the leased equipment at the end of the term. Not only does it cost just $1.00 to own, but it also allows the lessee to clearly define business costs and easily manage cash flow. Monthly payments, however, are typically higher than the payments of other leases.
• 10% buyout
At the end of the lease term, the lesee may choose one of three options: extend the lease, purchase the equipment for 10% of the Original plus any applicable taxes, or return the equipment with no further payment obligations.
• Operating Lease (Fair Market Value)
The Fair Market Value solution is excellent for those who expect the value of their equipment to decrease quickly, or will want to upgrade their equipment at the end of their lease. At the end of a lease term, the lessee may choose one of the three options: extend the lease, purchase the equipment for its “fair market value,” or return the equipment with no further payment obligations. Furthermore, Fair Market Value lease payments are treated as a business expense, not a liability, and can be deducted immediately from operating income.
This option is ideal for the lessee who wishes to own the leased equipment at the end of the term. Not only does it cost just $1.00 to own, but it also allows the lessee to clearly define business costs and easily manage cash flow. Monthly payments, however, are typically higher than the payments of other leases.
• 10% buyout
At the end of the lease term, the lesee may choose one of three options: extend the lease, purchase the equipment for 10% of the Original plus any applicable taxes, or return the equipment with no further payment obligations.
• Operating Lease (Fair Market Value)
The Fair Market Value solution is excellent for those who expect the value of their equipment to decrease quickly, or will want to upgrade their equipment at the end of their lease. At the end of a lease term, the lessee may choose one of the three options: extend the lease, purchase the equipment for its “fair market value,” or return the equipment with no further payment obligations. Furthermore, Fair Market Value lease payments are treated as a business expense, not a liability, and can be deducted immediately from operating income.
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“Own it if it appreciates…..Lease it if it depreciates” Equipment is basically lost capital, you don't make money by owning equipment, you make money by tapping into the full value of the productivity of the equipment Second golden rule relates to tax savings. Leasing can help to protect a business owners personal income. The entire lease payment is deducted immediately, instead of with a loan whereas depreciation and interest expenses are made over a longer period of time.. A faster write-off typically means larger deductions, with reduced taxable income and decreased tax expenses.** Please contact your CPA or other tax professional to see how Leasing will specifically affect your business. Third golden rule is flexibility. Payments can be structured so that payments are due when your equipment is in service and your business is profiting from it. It makes little sense if you are a commercial landscaper in Michigan to have a lease payment due in January, or for that matter in Farming or Construction!! Flexible payments can correspond with your business sales cycle. The fourth golden rule relates to cash retention. A lease can keep money in your business. Today's business owners have to maintain a solid position with their working capital. Leases don't require a big down payment, typically only one or two payments are made at the start. Therefore, you can get your new equipment without depleting your capital reserves. |
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