| Let's face it, the economic slowdown has tightened budgets and made it increasingly difficult to obtain the new
equipment and other capital assets you need. The expectations haven't changed, yet the financial realities have.
We can help you stay within a strict budget while still offering the best in technology and equipment for your company.
Leasing also helps businesses make the right capital allocation choices by removing the pressures of cost from
the decision-making process. When there's no room in the capital budget to buy an asset with cash, lease payments
from the operating budget are an attractive alternative.
Click on each of the following benefits to learn why more and more companies are turning to leasing as a financing
option. Please contact us through the Contact Us section or call our toll free number
(800) 496-4640 if you have any unanswered questions about what lease financing can do for you.
| Cash Management
Equipment Efficiencies
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Flexibility
Financial Issues
Off Balance Sheet Financing
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Little (Or No) Down Payment
With leasing, your initial cash outlay is generally limited to a deposit of one to three months of your minimum
lease payment. This leaves you with more cash for other areas of your business. Banks, on the other hand, often
require a down payment of 10 or 20 percent, which could be more than you can afford or more than you want to sink
into a down payment. Leasing is an excellent choice for avoiding a large initial cash outlay.
Reduced Monthly Payments
Lease payments are lower than loan payments because leasing involves fixed installments payable only for the period
of time you contracted to use the equipment. The amount of your actual monthly cash savings will depend upon the
type of property being leased along with other key factors.
Better Cash Management
Leasing brings financial peace of mind because you'll know at the outset exactly what your payments will be for
the duration of your lease. Payments are determined at a fixed amount, payable monthly, quarterly, semi-annually
or annually. Once established, they remain at that amount, no matter what.
Planned Replacement and Upgrade Schedules
A lease-financing package enables you to replace or upgrade property prior to the end of a lease on an orderly, predictable
timetable that fits your operating and financing needs. You're assured of having the most up-to-date property, which
leads to higher operating efficiencies and added capacity for your operations.
Avoid Potential Risks of Obsolescence
By leasing rather than buying capital assets, especially technology and communications equipment, you'll reduce
the possible risk of technological obsolescence. When the lease term expires, you can decide for yourself to keep
the property you already have or create a replacement schedule to upgrade to the newest property the market has
to offer.
Lower Maintenance, High Efficiency
By replacing and upgrading property on a regular basis, you reduce repair and maintenance costs. Productivity rises
through better integration of new property, and you'll have less down-time with property that operates more efficiently.
Flexible Payment Options
Lease payments can be structured around the use of the leased property, changes in revenue streams and the lessee's
accounting needs. Flexible payment options include scheduling payments at different intervals, on a step-up or step-down
basis, matched with cash flow from earnings generated by the leased property, or around swap leases.
Additional Credit Source
Leasing provides the chance to save cash and supplement existing bank relationships with an additional source of
credit. If a business is unwilling or unable to pursue a bank loan, leasing is an ideal alternative. Leasing also
provides businesses with more flexibility, because with lease financing they're not subject to compensating balances
or restrictive covenants often associated with bank loans or bond financing.
Convenience, Speed and Flexibility
CalFirst Leasing initially provides a master lease agreement spelling out the basic terms and conditions. We then
can quickly and easily add schedules with minimal additional paperwork and streamlined approval procedures as your
needs evolve for additional property and financing. CalFirst Leasing follows through with prompt and courteous customer
service during the lease's duration.
With a lease from CalFirst, you can select the property you want from the vendor of your choice. Just tell us
what you've selected, and we'll do the rest.
Off Balance Sheet Financing
Whether or not a lease appears on the balance sheet depends upon its classification-capital or operating-from the
perspective of the lessee and its accountants. If the lease is a capital lease, the lessee from an accounting standpoint
is treated as owner of the leased property. Financial Accounting Standards require owned property to appear as an
asset with a corresponding liability on the balance sheet. Leased assets are expensed when the lease is an operating
lease. Such leases do not appear on the balance sheet, but rather show up as an operating expense on the income
statement. These assets do not appear on the balance sheet, which can improve financial ratios. Only the balance
sheet footnotes disclose the existence of operating leases.
The most important benefit of operating leases is the effect they have on financial ratios. Off-balance-sheet
financing lowers the debt to equity ratio, raises the current ratio (liquidity), and increases return on assets
(ROA). Improved ratios may help an organization obtain additional traditional financing, providing more capital
for growth and profit-generating activities. Operating leases can help improve financial ratios which are often
used to measure the performance of organizations and their management. You should consult with your accountants
regarding the availability of off-balance treatment through leasing.
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