WHAT IS LEASING?

Leasing is an alternative method of purchasing Capital Equipment that is needed to help business grow and operate more efficiently. It requires a customer (Lessee) to make specific monthly payments over a mutually agreeable fixed period of time (typically one to five years). Title for the equipment rests with A C Capital Leasing (Lessor) for the term of the lease. At the end of the term, a purchase option provision may be exercised by the Lessee, and the title of the equipment is passed at that time.

As an alternative source of financing, leasing has become so widely accepted that it is now the method used for 75% of all capital equipment sold in the United States (approximately $170 billion annually). By the year 2001 leasing will be a $500 billion industry

The primary value of equipment is in its use... not its ownership. This has been underscored by the new tax law, which makes the leasing of capital equipment more attractive for companies of all sizes.


WHAT ARE THE ADVANTAGES OF LEASING?

·Leasing offers 100% financing at fixed rates. Leasing terms can be structured beyond normally available bank loan terms.

·Leasing allows for the preservation of capital, which may be retained and utilized elsewhere to increase profits. Leasing is a predictable budgetary tool since payments are fixed and not subject to the fluctuations of the Prime Rate as in the case with bank loans.

·Leasing allows for the preservation of bank lines of credit, which can be kept unencumbered for shore term borrowing. Since leasing does not involve your bank lines, there is no necessity for compensating balances or the pledging of collateral other than the leased equipment itself.

·Leasing (true leases) can be structured so that lease payments are totally expensed and the value of the equipment kept off the balance sheet. This is a preferable alternative to the new depreciation schedules as well as the potentially expensive impact of the new alternative minimum tax.

·Leasing does not require large down payments, which normally is the case with bank loans. Also with leasing, there is no advance layout of sales tax. Under the new law sales taxes are no longer deductible.

·Leasing is a hedge against inflation. It allows you to receive the benefits of your equipment today and pay for it with tomorrow's dollars.

·Leasing affords you more flexible options at the end of the lease term: The equipment can be purchased for its fair market value or a preset price, released for an additional period of time, or returned to us.