Mazuma Capital Partners: Consider Leasing for Equipment Purchases

Mazuma Capital Partners: Consider Leasing for Heavy Equipment: "In need of new equipment, but not ready to use all your capital to purchase it? Leasing is a GREAT solution. Why you ask? No..."

Consider Leasing for Heavy Equipment

In need of new equipment, but not ready to use all your capital to purchase it? 
Leasing is a GREAT solution.  Why you ask?

Not only does leasing help you conserve your cash, it also ensures that you don't wind up paying for equipment that becomes obsolete or unsuited for your needs. And think about this: if you need the equipment only for a short time or special project, leasing saves you the hassle of having to be both a buyer and, then later, a seller. 

Mazuma Capital will work on crafting a lease to help minimize your federal income tax liability, maximize your accounting objectives and customize cash-flow solutions to your budget.  Our Associate Structuring Group has expertise in all these areas and will help guide you to the best structure for your situation.

From technology and medical equipment to renewable energies, leasing is a great option. There's no limit to the type of equipment available for leasing. Even a one-person operation can lease equipment. Unlike loans, leases do not require a down payment. You're required to pay for the use of the equipment during the lease term. You may also be responsible for routine maintenance and other costs as well. When the lease expires, the equipment goes back to the leasing company, you can opt to purchase however you choose to complete your obligation.

Lease payments are considered an expense that you deduct from your business income, just like any other expense.

Flexibility is another leasing feature. If customers or the competition demand that you always have the latest technology, a short-term lease can help you get what you need and keep your cash in other uses. Another plus is that most leasing companies offer lease-to-own plans if you determine that purchasing the equipment is in the best interests of your business.

The Equipment Leasing and Financing Association, a trade group of leasing companies and financial services companies, has a special section that explains the basics of leasing at its website, elfaonline.org. You'll also find guidance on leasing options and benefits, loan/lease differences, leasing terminology.

Mazuma Capital is a national direct lender, financing $100K-$10MM transactions. 
Mazuma Capital offers amazing vendor services and broker programs as well. 
Contact Mazuma at info@mazumacapital.com 801-816-0800.

• Tax oriented leases “true or guideline” leases
• Non-tax oriented leases
• Loan, conditional sales contracts, balloon, and other purchase option structures
• Operating leases
• Lease facilities
• Sale & lease back options
• Step up/step down leases
• Seasonal leases
• Differed payment options
• Bundled lease products
• Non-tax operating leases, and other tax/GAAP products

Aviation Industry Says Leasing Remains #1 Source of Finance

Leasing remains the most important form of finance in the aircraft sector. According to research commissioned by CIT, 54% of respondents revealed that more than 50% of their fleets are leased, and they expect this to remain fairly consistent over the next five years.

Support funding from manufacturers (51%) ties with bank loans as the second most important form of aircraft finance followed by export credit loans (39%), secured bonds (28%), government loans (25%) and tax leases (24%). Leasing makes an appearance at some 11% in terms of funding importance.

Mazuma Capital Partners: Benefits of Technology Financing

Mazuma Capital Partners: Benefits of Technology Financing: "The Equipment Leasing and Finance Association (ELFA) estimates that eight out of ten U.S. companies lease at least some equipment, but what ..."

Benefits of Technology Financing

The Equipment Leasing and Finance Association (ELFA) estimates that eight out of ten U.S. companies lease at least some equipment, but what many people don’t realize is that there are flexible financing options available for almost any kind of technology equipment, including software, services and training.

Equipment financing is a popular way to maximize your purchasing power largely because it is a cost-effective way to obtain the newest equipment without a large outlay of cash.

Financing also helps shield you from the effect of equipment obsolescence, a real issue for all those using any type of technology asset. It’s easy to add the latest software version to your master lease so you don’t have to worry about working with outdated technology.

Some of the recognized benefits of financing technology equipment include:

• Reduced Tax Burden - The IRS does not consider certain leases, for example, to be a purchase, but rather a tax-deductible overhead expense. Therefore, you may be able to deduct the lease payments from your corporate income.

• 100 percent financing – Some financing options require very little money down - perhaps only the first and last month's payment are due at the time of the acquisition.

• Immediate write-off of the dollars spent - With some financing options, payments can be treated as expenses on a company income statement, so equipment does not have to be depreciated over the useful life of the equipment.

• Flexibility - As your business grows and your needs change, flexible financing options provide more opportunities for businesses to add or upgrade equipment during the lease term.

• Asset management – Financing provides the use of technology equipment for specific periods of time at fixed payments. With some financing structures, the finance company assumes and manages the obsolescence risk of equipment ownership. At the end of the finance terms, the financing company is responsible for the disposition of the asset.

• Upgraded technology – Equipment that is frequently updated, such as software, should be financed to limit your risk of being stuck with obsolete equipment. It’s easy to add the latest software version to your master lease, for example, so you don’t have to worry about working with outdated technology.

• Improved cash flow – Many finance structures can result in a lower monthly payment when compared to a standard loan. In addition, some finance companies offer seasonally adjusted payments to match a company’s needs.

Finance Services Too

Training, support and other services are vitally important to a successful technology implementation, yet they are some of the most overlooked costs involved with a technology acquisition.

Often, everything involved in a technology purchase, from the software to the services and training can be bundled into one predictable monthly lease payment, making it easy to budget for all costs associated with a technology acquisition.

Employment & Capital Spending Outlooks Strengthen

January 2011 survey conducted by the National Association for Business Economics (NABE) confirms that the underpinnings of the U.S. economy continue to strengthen. The survey notes that U.S. companies' employment outlook improved to a 12-year high this quarter. On capital spending, 62% of respondents said they planned to boost capital spending, up from 48% last quarter.

Shawn DuBravac, chief economist of the Consumer Electronics Association said, "The number of firms expressing positive hiring plans is at a level not seen in over a decade - a sign of improving labor-market dynamics. Supporting these hiring plans, industry demand continues to move higher, and profit margins are expanding." DuBracac added, "Firms are increasing their plans for future capital spending. A majority of respondents anticipate no increase or decrease in investment spending or employment in response to new tax policies, suggesting business decisions are being driven by the fundamentals of an improving economy."

Survey highlights included the following:

·  Expectations for economic growth have improved significantly. Over the last quarter, NABE panelists have become more optimistic. A majority (62%) assumes real GDP growth of 2% to 3% in 2011, and one in five panelists is building business plans based on an outlook of 3% to 4% economic growth.

·  Employment continues to improve, with 34% of firms reporting larger workforces compared to only 13% a year ago. The share of firms cutting jobs shrank, from an average of 13% over the past three quarters to 6% currently. The current NRI is the highest level it has been since 1998. The hiring outlook for the next six months also looks more robust - 42% of respondents indicated their firms will be increasing employment, up from 39% last quarter and 29% in January 2010. The employment outlook NRI hit a 12-year high.

·  The share of firms increasing their capital spending from the previous quarter rose slightly from the prior survey to 38%, while only 6% of panelists reported cutbacks in their firms. Expectations for future capital spending improved significantly, with 62% of respondents reporting higher planned expenditures, up from 48% last quarter.

·  As for the expected impacts of the proposed 2011 tax package, more than half (53%) of the panelists, especially those from the goods-producing sector, anticipate a favorable impact on their firm's sales. In contrast, a majority of the respondents (60%) said they do not anticipate any increase or decrease in investment spending or employment in response to new tax policies.

Is There a Shining Star in Manufacturing? Sector Creating More Jobs than It's Cutting

U.S. manufacturing, viewed as a lost cause by many Americans, has begun creating more jobs than it eliminates for the first time in more than a decade.

As the economy recovered and big companies began upgrading old factories or building new ones, the number of manufacturing jobs in the U.S. last year grew 1.2%, or 136,000, the first increase since 1997, government data show. That total will grow again this year, according to economists at IHS Global Insight and Moody's Analytics.
Among others, major auto makers—both domestic and transplants—are hiring. Ford Motor Co. announced last week it planned to add 7,000 workers over the next two years.
The economists' projections for this year—calling for a gain of about 2.5%, or 330,000 manufacturing jobs—won't come close to making up for the nearly six million lost since 1997. But manufacturing should be at least a modest contributor to total U.S. employment in the next couple of years, these economists say.
After a steep slump during the recession, manufacturing is "the shining star of this recovery," says Thomas Runiewicz, an economist at IHS. He expects total U.S. manufacturing jobs this year to rise to about 12 million. Currently, manufacturing jobs account for about 9% of all U.S. nonfarm jobs; the average pay for those jobs is roughly $22 an hour, or nearly twice the average for service jobs, according to government data.

Source: WSJ, Moody’s Analytics