Equipment Leasing Touts Many Benefits for Companies in the Fourth Quarter

Friday, November 01 at 10:50 AM
Category: Business Banking

Business owners can use a variety of tax advantages, dealer closeouts and other benefits offered during the fourth quarter of the year to lease equipment they need to grow their businesses in 2014 without stressing their 2013 budgets.

Leasing equipment is a smart way for business owners to acquire the equipment they need and the fourth quarter of the year is prime time for equipment financing as business owners begin to look at projections and needs for the upcoming year. Additionally, worn-out equipment is typically replaced at the end of the year.

“The fourth quarter of the year is a great time for businesses to think about financing equipment and the flexibility that gives them to preserve resources for other needs as the year ends,” said Kyle W. Gilliam, Arvest Equipment Finance (AEF) President and CEO. “Whether you need information about leasing or financing equipment, AEF is here to help. We have a close relationship with Arvest lenders, and we’ve been able to successfully inform customers about the benefits of using AEF, such as the ability to finance up to 100 percent of the cost of equipment with no down payment.”

Many equipment companies offer heavy discounts and year-end closeouts on equipment that might have a design change for the next year but are still perfectly serviceable for a small business or farming operation.

Seven out of 10 U.S. companies will finance equipment through loans, leases or lines of credit in 2013, according to the Equipment Leasing and Financing Association (ELFA). ELFA also stated* credit market conditions are expected to remain favorable for long-term equipment financing throughout the year.

A business owner also might find an investment in equipment during the 2013 fiscal year might reduce tax liabilities for the year.

While buying a piece of equipment with cash on hand might make sense in some situations, leasing that same piece of equipment can have benefits not readily apparent to the business owner. For example, when a business pays for equipment with cash, it is paying for that equipment with post-tax dollars, which is essentially adding those taxes to the sales price of the equipment itself. Leasing equipment allows the owner to use pre-tax dollars and classify that expense as a deduction against revenues before taxes. Since the leasing company retains ownership of the equipment during the long-term rental agreement, the owner can then write off the lease payment as an expense, according to LeaseQ.*

AEF, a division of Arvest Bank, has grown quickly to be ranked among the top 100 largest equipment finance and leasing companies in the United States by Monitor Daily, after only six years. Monitor Daily is the leading publication of the equipment leasing and finance industry. The annual Monitor 100 ranks the largest equipment leasing and finance companies based on net assets and new business volume. The 2013 Monitor 100, published in June 2013, ranks AEF as 99th on the list in terms of 2012 assets.

AEF’s 2012 net assets totaled $123.5 million in loans and leases, up 2.4 percent from 2011. The industry’s overall net assets among the top 100 companies is $548.8 billion, up 5.8 percent from 2011.

Links marked with * go to a third-party site not operated or endorsed by Arvest Bank, an FDIC-insured institution.

Tags: Arvest Biz, Business Banking, Equipment Finance
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