MaxPro Leasing - Bank Loan vs. Leasing

Bank Loan vs. Leasing
Let’s take an informative look at how accessing a bank loan or line of credit can affect your business when acquiring assets:

	MaxPro Leasing	Bank Loan
Protection against obsolete equipment?	Yes, leasing is flexible, you can either buy the equipment, continue to lease, or return it to the Lessor.	No, you better grab a classified ad because now you have to figure what your going to do with that outdated equipment
Working Capital Reserved?	Yes	No
Flexibility	Yes	No
Predictable Payments?	Yes	No, with a bank loan you might have to deal with a fluctuating rate so depending on the economy your payments could be higher.
Deferred initial Payment	Yes, possible to defer first payment for up to 90 days.	No, 100% initial payment due up-front.
Upgrade equipment without difficulty to cash flow?	Yes	No
Can I avoid affecting my bank line of credit for future borrowing	Yes	No, if purchasing property, inventory, or improvements you'll need a bank line of credit to finance, If you use this line of credit for purchasing your equipment you have even less money left over to use for financial emergencies or unexpected expenses.
Can I acquire equipment without a substantial cash investment	Yes	No, usually 10-30% down.
Can I match my equipment payment to my cash flow	Yes	No
Can I return the equipment after I use it?	Yes, with the right end of lease option you have more flexibility	Now you have to worry about selling it or getting rid of it.
Tax Advantages?	Yes, operating lease payments can be tax deductible when shown as operating expense.*	Depreciation is typically taken over the useful life of the equipment

*Consult your accountant on tax benefits.

Naturally, some businesses may feel comfortable approaching their own bank when they need to purchase new equipment. You think your getting a low rate and you feel comfortable because you bank there, right? However, do you realize that comfortable feeling can turn into an unpleasant feeling when you figure out how much that decision may cost you in the end? How? We're glad you asked.

When and if banks finance the equipment you need they usually place a blanket lien on your business. This gives them title to all you have or will have. With leasing, we only place a lien on the equipment.

Did you know that banks could accelerate your payments if they feel your company is doing poorly according to financial statements? With leasing, we don't butt into your business. Once you sign the lease agreement, you have a predictable set of payments. Its that simple! Plus, the rate is fixed with a lease. Whereas, a bank often charges you a fluctuating rate which means your in for a roller coaster ride so you better buckle up! Well, you get the picture… Oh, one more thing when you access your bank line of credit did you know your overall future borrowing potential is decreased? Leasing provides you with a new source of credit leaving your personal lines of credit open for your future needs. Got questions...Great!

You can look into the Frequently Asked Questions to find the right solution.