Equipment Leasing Overview

When is leasing AV technology the right choice?

How many organizations put off purchasing good multimedia systems, or "make do" with outdated and inadequate technology because of the cost? You need it, you'd put it to incredibly good use, you have the right team to work the system……in other words, NOW is the time…..but the bank account says "no".
Leasing may turn that "no" into "now", and help you manage your monthly payments as you use the high-quality technology you need. Here is a general overview of the pros and cons of leasing, which may help you decide whether leasing is right for you..

Types of Leases

There are 3 standard lease types:

Leasing Companies

There are a large number of financial institutions that manage lease programs. Some equipment manufacturers and dealers offer leasing arrangements through one particular financial company that they have found to be reliable and offer choice leasing and financing options. For example, Proxima/InFocus projectors work with American Express Business Finance. Chase Small Business Leasing is also often used. Many equipment dealers will have certain financing companies they prefer to work with. We're not "plugging" these institutions, only mentioning them as examples of leasing companies that have experience with audio visual equipment specifically.

Benefits of Leasing

· 100% financing is available in most cases (including "soft costs" like software, training in many cases).
· You will typically get a better grade of equipment than if you were saving to buy outright.
· The fixed interest rate provides fixed monthly payment for a level cash flow- you get to hang on to your capital!
· Terms from 2 to 7 years are available.
· Documentation fees are lower.
· The application process is easy.
· Various end-of-term options are available.
· Leasing can minimize risk and obsolescence: Some leases offer freedom to add on or upgrade equipment during the lease.
· Tax Savings are realized in some states: The cost of leasing can often be treated as an expense deduction - a larger tax deduction than a depreciation expense.
· Usually leasing does not effect your line of credit, unlike traditional financing.
· Lease payments may not increase your liabilities as a loan does.

Liabilities of Leasing

· You are paying interest- therefore the cost of the purchase is higher in the long run.
· Danger of badly written contract with a too-high buy-out or problems if the equipment should become damaged, or no provisions for upgrading or adding on to your system.
· Depreciation of equipment's value may leave you upside down- the buy-out may be more than the actual value of the equipment.

Leasing Costs

While rates can vary significantly based on your financial standings, here are some samples of payment plans according to cost of equipment:

Type of Lease	Value	24 months per month	48 months per month
10%	$5,000.00	$249.00	$145.00
$1	"	$264.00	$155.00
10%	$10,000.00	$489.00	$283.00
$1	"	$581.00	$303.00
10%	$25,000.00	$1,209.00	$691.00
$1	"	$1,289.00	$742.00

Suggestions

· Shop around for your lease program. Look for companies that offer service support and other benefits.
· Get references- and check them!
· Get a written commitment of the amount due at the end of the lease. It should be clearly noted on the lease!

Like any financial decision, whether or not leasing is the right choice for you can only be determined after a thorough exploration of all your options!