Finance, Purchase, and Lease Options:
What is best for you and your company?
That is always a great question. First, we always recommend you talk to your accountant. We want you to maximize how far your dollar goes and make sure that you are getting the best write-off available for your business. Section 179 and Section 168 allow businesses to write-off vehicles at an accelerated rate. This amount varies from year to year.
Further information released by the IRS about Section 179 and Section 168 can be read here.
Capital Purchase:
Business assets you purchase such as machinery, vehicles, cash registers, computers, (these items are also referred to as plant an equipment) land and buildings. Whether you pay in full or finance through a third party bank.
We have clients that will pay for the vehicle outright. However, cash is king. So, we understand keeping your cash flow liquid is important. Therefore, many of our clients will financeContact us to request an application for financing through banks for your business the vehicle with 10 to 20 percent down and find a payment that is more manageable, and then pay it off early. Since we offer loans with no prepayment penalties, this allows you to manage your risk much easier.
Lease:
A contract by which one conveys real estate, equipment, or facilities for a specified term and for a specified rent
Closed End Lease
We offer lease payment options through different lenders for folks that want a monthly write-off and do not travel greater distances for work. This reduces the upfront costs and allows for a consistent write-off. The lender pre-determines what the residual valueThe remaining value of a vehicle at the end of a leas that the bank determines in advance is ahead of time based on the term you choose. If they are off, they must absorb the difference. However, if they are conservative, which they usually are, they get to keep the value difference when they sell it after the term is up.
TRAC Lease:
An open-end lease agreement with no limits on mileage or excess wear.
Open End Lease
Wear and mileage may reduce the vehicle’s residual value and the lessee is responsible for any difference between the residual value stated in the TRAC (Terminal Rental Adjustment Clause) agreement and the actual residual at lease end. TRAC leases allow you to choose, in advance, nearly every aspect of the lease terms. On a traditional Closed End lease, the bank chooses the terms and you must agree with them. However on open leases, because you choose the terms (within the lenders guideline), there is a lot more flexibility for the client to choose the best terms for their business. If you want a higher write-off, then you can pick a lower residual value and pick the end value up front. This puts more risk on the buyer, but this can offer many more write-offs for businesses, especially for companies that have several vehicles in their fleet. If you choose a 5% residual, and at the end of the term it is worth 20% of the original value, then you keep the difference. Also, there are no mileage or condition restrictions since you are responsible for the end value.
Guarantor:
Whether you finance, lease, or choose a TRAC Lease, we offer the option to be a guarantorA person who agrees to repay the debt should the borrower default. Being a guarantor works internally like a co-signer. However, the co-applicant’s name is not listed on the paperwork. Credit bureaus report debt. Many business owners and managers bog down their personal debt with finances that are the responsibility of the business. Loans and leases with a guarantor keep the debt in the business and build the credit of the business. Unless there are late payments of default, the debt stays off the personal credit. This keeps the debt off your personal credit and lowers your personal liabilityBy keeping your personal name off of the title and registration, the liability of the vehicle rests on the company. Your business name is on all of the docs and you are internally a co-applicant with the lender to get lower rates, but your personal name stays off the documents to avoid liability on your personal assets.
Upfits:
Regardless of which option best suits you, our lenders consider the upfit cost to be a portion of the vehicle. Therefore, you can finance or lease the full amount and keep your cash in the bank!
Regardless of which option best suits you, our lenders consider the upfit cost to be a portion of the vehicle. Therefore, you can finance or lease the full amount and keep your cash in the bank!
Dedicated Business Specialists:
Schedule a good time to get together with one of our BusinessLink Consultants to discuss your options, and figure out what is best for you and your business. This is what we do 100% of the time. So, we understand the needs and time restraints of business owners and operators. We cut out the back and forth and streamline the entire process.
Schedule a good time to get together with one of our BusinessLink Consultants to discuss your options, and figure out what is best for you and your business. This is what we do 100% of the time. So, we understand the needs and time restraints of business owners and operators. We cut out the back and forth and streamline the entire process.