Leasing

Park Customers Gain Leasing Advantages

Park Industries works with a variety of sources to help you add a high-performance Park machine to your operation. Talk to your sales representative or e-mail us today for more information.

Leasing Leverages Your Cash Flow

An equipment lease is an equipment financing option in which a lease company retains ownership of the equipment in exchange for monthly rental payments. Research suggests that about 80 percent of American corporations lease equipment. It’s a tried-and-true method of generating profit. Owning equipment has limited value compared to actually using the equipment. Without buying outright or borrowing money and leasing instead, a company's cash and equity isn't tied up in equipment.

At Park, you can purchase the machinery at the end of the lease. For a low down payment and fixed monthly payments, your company uses the equipment without large initial expenditures. Most companies find it’s an excellent way to leverage cash flow.

Tax Opportunities

Lease payments may be considered pretax dollars and fully deductible operating expenses. Leasing may eliminate the need for complicated depreciation schedules and could accelerate tax benefits. You also may avoid the Alternative Minimum Tax by paying for the equipment out of current, untaxed income instead of from pretaxed profits. The more profitable the company, the greater advantage of a lease. Consult your tax advisor to evaluate your potential deduction benefits.

Financial Reporting

As your company prepares its annual financial reports, you’ll see that leasing provides some additional opportunities.

Leased equipment is its own collateral.

Off Balance Sheet Financing: A capital purchase must be listed as an asset and a corresponding liability. As years pass, depreciation and interest expenses have to be accounted for. Leased equipment is not required to be capitalized in financial statements. Leased equipment is footnoted, so a company's financial ratios and measurements improve. Leased equipment does not create a liability, so the company appears less leveraged.

Increased Return on Assets: Leasing doesn't increase a lessee's asset base, which allows a company to report a higher return on assets.

Improved Cash Forecasting: Leasing payments are locked in for the term, eliminating uncertainties regarding the future cost of equipment.

Leasing Avoids Obsolescence

During or at the end of a lease, you have the option to upgrade to a more technologically advanced machine. If you are going to upgrade, a simple phone call and the remaining principal balance of the old equipment is added to a new lease. Park makes it easy to stay competitive.

For more information about leasing, please contact your Park sales representative or e-mail us today.