Leasing
Altfest Auto Leasing, Inc.
“Serving your Transportation needs for over a Quarter of a Century”
Altfest Auto Leasing will get you the best available programs offered by our banks as well as the manufacturers themselves. Some of the programs available are 0% financing, thousands of dollars in rebate money and the best available price to you as the customer.
Please read the following to get many of your Leasing questions answered.
Print out the Leasing Application (PDF Format), fill out the proper information, sign, date and FAX back to Sub Zero at 718 532-3064
Got Questions? Call us at 718 532-3064.
Why Do Companies Lease?
There are many reasons why companies lease their equipment from Altfest Auto Leasing. Equipment leasing provides flexibility and protection against technological obsolescence. Leasing allows a company to better match cash outflow with revenue protection through the use of equipment. Leasing conserves valuable working capital and bank lines. Equipment leasing is efficient, convenient, and allows for 100% financing.
Top Ten Reasons Why Companies Lease
  1. Purchasing Power. Equipment lease financing allows the lessee to acquire more and/or higher-end equipment.
  2. Balance Sheet Management. Certain types of leases help the lessee better manage the balance sheet and improve the overall financial picture, by conserving operating capital and freeing up working capital and bank credit lines for inventory, expansion and emergencies.
  3. 100 Percent Financing. With equipment leasing, there is no down payment. The term of the lease can be matched with the useful life of the equipment.
  4. Asset Management. A lease provides the use of equipment for specific periods of time at fixed payments. It assumes and manages the risks of equipment ownership. At the end of the lease, the lessor disposes of the equipment.
  5. Service Additions. Many lessees choose to structure their leases to include installation, maintenance and other services, if needed.
  6. Tax Treatment. Leasing offers the option of deducting 100 percent of the lease payment as a business expense.
  7. Upgraded Technology. Leasing provides companies the ability to keep pace with technology. The lessee can upgrade or add equipment to meet ever- changing needs.
  8. Specialized Assistance. Lessors are specialists in equipment leasing and financing, and understand capital equipment markets.
  9. Flexibility. There are a variety of leasing products available, allowing the lessee to customize a program to address needs and requirements – cash flow, budget, transaction structure, cyclical fluctuations, etc.
  10. Proven Equipment-Financing Option. Over 30 percent of all capital equipment in the United States is acquired through leasing. In fact, 8 out of 10 companies lease their equipment.
Who Leases Equipment?
Eight out of ten American companies lease all or some of their equipment. Each year more companies, particularly small companies, choose to procure new productive equipment through leases rather than loans. Companies that lease tend to be smaller, growth and technology oriented organizations. According to the Equipment Leasing Association, leasing continues to be the most widely used method of asset-based financing in the U.S., accounting for approximately one-third of the external financing of capital investment. The 2003 estimate for leases is $208 billion out of $688 billion in total new business equipment investment. The figure is up from $204 billion in equipment leases on $655 billion in new business equipment investment for 2002. The projection for new equipment investment in 2004 is greatly improved at $709 billion, of which $218 billion will be leased.
The Difference Between A Loan & A Lease
Loan (bad): A loan required the end user to invest a down payment in the equipment. The loan finances the remaining amount.
Lease (Good): A lease required no down payment and finances only the value of the equipment expected to be depleted during the lease term. The lessee usually has an option to buy the equipment for its remaining value at the lease end.
Loan (bad): A loan usually required the borrower to pledge other assets for collateral.
Lease (good): The leased equipment itself is usually all that is needed to secure a lease transaction.
Loan (bad): A loan agreement usually includes restrictive covenants that require the customer to maintain certain financial ratios that may restrict the customer’s ability to borrow future funds. In the event the customer violates one of more of the covenants, the lender has the right to demand payment in full of the outstanding loan mount even though the loan payments have been made on time.
Lease (Good): A lease does not contain restrictive covenants that limit the lessee’s ability to borrow future funds. As long as the lessee continues to make their lease payments, the lessor can not disrupt the lessee’s use of the equipment or demand the immediate payment of the outstanding lease payments.
Loan (bad): A loan usually required two expenditures during the first payment period; a down payment at the beginning and a loan payment at the end.
Lease (good): A lease requires only a lease payment at the beginning of the first payment period which is usually much lower than the down payment.
Loan (bad): The end user bears all the risk of the equipment devaluation because of new technology.
Lease (good): The end user transfers all risk of obsolescence to the lessors as there is no obligations to own equipment at the end of the lease.
Loan (bad): End users may claim a tax deduction for a portion of the loan payment as interest and for depreciation which is tied to IRS depreciation schedules.
Lease (good): When leases are structured as true leases, the end user may claim the entire lease payment as a tax deduction. The equipment write-off is tied to the lease term, which can be shorter than IRS deprecation schedules, resulting in a large tax deductions each year. The deduction is also the same every year, which simplifies budgeting (Equipment financed with a conditional sale lease is treated the same as owned equipment)
Loan (bad): Financial Accounting Standards require owned equipment to appear as an asset with a corresponding liability on the balance sheet.
Lease (good): Leased assets are expensed when the lease is an operating lease. Such assets do not appear on the balance sheet, which can improve financial ratios.
Loan (bad): A larger potion of the financial obligation is paid in today’s more expensive dollar.
Lease (good): More of the cash flow, especially the option to purchase the equipment, occurs later in the lease term when inflation makes dollars cheaper.