***Important Note From Our Leasing Director***
Recently I came across an article that I felt needed to be shared with everyone who is business for themselves. Up until I read this article, I wasn't too clear on bank loans myself as I offer equipment leasing. However, I found this to be quite interesting and educational thus the staff here at INBEE Financial agreed we should share it with our clients and potential clients.
The article went something like this -
As a fellow business owner, we are often assaulted with calls from leasing companies and banks in an effort to get our business. I was recently approached by a representative from a fairly large, nationally known bank offering me an enticing proposal. Since they were my very own bank, I decided to lend them my ear and see what they had to say. It went something like this.
"Dear Mr. business owner, I have been authorized by our bank manager to offer you & your Company a preferred rate loan. Your first year carries with it a fixed 7.5% interest rate with no fees.
At the beginning of the following year the rate will only be prime plus 1%, and there will be a fee of only 1% of the entire credit line.
Furthermore, as a result of your commendable credit score and reputation, we are ready to provide you with a loan up to fifty thousand dollars without requiring any sort of financial statement, In addition, we will even provide a business checking account to you and your company free of charge. As needs arise, all you need to do is draft a check for your loan proceeds as you want them. All we require in exchange is that a minimum balance of ten thousand dollars is kept in the account. "With all this in mind it seems that the bank representative has just granted you fifty thousand dollars to work with.
However, upon closer inspection should you require forty thousand dollars for your business you must in turn borrow fifty thousand dollars - forty thousand dollars for your business and ten thousand dollars for the supposedly free checking account in which a minimum balance of ten thousand dollars must be maintained. Or you must provide $10,000 to be applied towards the free checking account associated with this great offer.
Please Note: Even if you normally do keep $10,000 or more in your business account on an average, normally having it in the account and needing to keep it in the account are two entirely different viewpoints and should be noted in this case. Now then, with this forty thousand dollar figure in mind your business must pay interest on fifty thousand dollars, at 7.5% per year the payments on a fifty thousand dollar loan for a three year term are $1,555.31 per month.
Already having received a forty thousand dollar loan and paying the interest for a fifty thousand dollar loan you can expect to pay 23.33%. Furthermore, in year two the interest goes up to prime plus one, not to mention a 1% fee. Even if there were no increases in the prime rate, payments will be $1,652.12 based on a fifty thousand dollar loan, and you are only given use of $39,500. This works out to be an interest rate of 27.59%.
Things that make you go Hmmm?
Business owners must decide whether to lease business equipment or get a loan from a bank to purchase the equipment. According to the Equipment Leasing Association, as many as eight out of ten U.S. businesses choose lease at least some of their business equipment. This is due to the numerous business advantages that leasing plans offer.
Consider the following: Business assets that appreciate in value can be extremely beneficial to own, but assets that depreciate in value should be leased. Leasing the business equipment allows the equipment to pay for itself during the lease term while leaving bank lines and valuable cash untouched (liquid). Leasing business equipment, rather than buying it, offers low upfront costs and leaves your money available for other business and investment opportunities.
Leasing Makes Good Business Sense
Leasing makes good business sense for many reasons including the tax advantages. Depending on how the equipment lease is structured, you may be able to fully deduct lease payments, reducing your taxes. Most businesses can deduct 100% of their lease expenses, while bank loans must be capitalized and depreciate over several years. Simply put, leasing allows you to get the most use of business equipment with the least investment.
Business Advantages of Leasing
Many businesses are now choosing to lease their business equipment, rather than taking out a loan from a bank. It is usually easier as it takes less paperwork and it leaves bank lines available for other business needs. It also leaves your personal credit bureau unencumbered as it is done in the name of the business and establishes business credit rather than personal.
In addition to conserving company capital and maintain existing positive bank credit lines, leasing rather than paying cash also offers numerous tax benefits and savings when put together correctly. If you are working with a "true" lease, your payments can be fully expensed, thus accelerate tax deductions. To learn more about the tax benefits of lease versus purchase, talk with your accountant or CPA to find out what tax benefits are available to you in your state.
View the detailed Tax Benefits of Leasing and IRS Instructions.
When you request an equipment lease from INBEE Financial , you can expect to pay very little or even nothing down. You can even expect to receive fixed payments over the term of the lease or finance agreement. This alone can save you hundreds, if not thousands less than what you could pay should you contract one of these loans mentioned above.
By taking advantage of a "You Design" leasing program from INBEE Financial , you can expect to pay hundreds less than you would with a loan as well as receive additional tax benefits. CONTACT US today to learn more about leasing options for your business.
Saturday, November 17, 2007
4 Ways to Attract Success
Sometimes living everyday it’s hard, when going through the motions, to step back and evaluate where you are and where you want to be. There is always something that is important and needs to get finished. As we grow older time seems to fly by and personal time disappears. It’s funny and ironic that: in our personal time we as humans dream, discover, and explore our inner most desires.
So, as the days go on, the time for planning our future is reduced to the carpet that needs replacing and the PRM report need by Friday. Is it possible to find time to dream?
It is in those times of dream, discover, and exploration ideas are created, enterprises are discovered, and communities are changed. If it is true that success attracts success; how do we get the ball rolling with all of the other challenges in our lives? Can a person continue their life, job, and responsibilities and make a difference in the future?
The following and methods used to create success, build wealth, and fulfill dreams
I have discovered 4 ways to get the ball rolling and get on the right track. These methods are for people dedicated to taking the lead in life and are methods used by many of the world’s most successful people.
Read
It seems simple enough, however my suggestions is to read things you are already interested in. By reading you can begin to distort your experience cure. Reading can eliminate many of the problems someone else had in your similar situation. Reading expands your mind and helps you to dream. Reading can be accomplished while standing in line or waiting for an order. I read somewhere that if you read about on topic for thirty min. every day for the next five years, on one topic, by the fifth year you would be an expert on that particular subject.
Write
Keep a note pad and when you have an idea where ever you are jot it down. After six months go back and read through your note pad. If you remember what you were writing about it is probably important to you. Not only is it important to write ideas down on note pads. It’s important to make lists of things needed to be accomplished, and to keep a calendar. It is also important to develop writing skills; it will help with person to person communication.
Investigate
Ask thousand of questions about the things you are interested in. When you do this you first do not come across as a know it all, and second, by asking questions people will begin to realize you are interested in one particular subject and lead you in the direction of answers. People will be on the look out for you. Say you wanted to change the local community center for the better. By asking questions people you know will lead you to where you want to be.
Speak
It is funny that when you share information how much more knowledgeable you become. (A side note: people’s number one fear is public speaking.) Many of the times the things that keep people from accomplishing goals is fear of success. By overcoming your fear of public speaking you are moving psychologically into a transition and therefore able to tear down the mental barrier that keeps you from becoming successful. It is not only important for you to speak but it is also important for you to listen to other speak.
How successful are you?
So, as the days go on, the time for planning our future is reduced to the carpet that needs replacing and the PRM report need by Friday. Is it possible to find time to dream?
It is in those times of dream, discover, and exploration ideas are created, enterprises are discovered, and communities are changed. If it is true that success attracts success; how do we get the ball rolling with all of the other challenges in our lives? Can a person continue their life, job, and responsibilities and make a difference in the future?
The following and methods used to create success, build wealth, and fulfill dreams
I have discovered 4 ways to get the ball rolling and get on the right track. These methods are for people dedicated to taking the lead in life and are methods used by many of the world’s most successful people.
Read
It seems simple enough, however my suggestions is to read things you are already interested in. By reading you can begin to distort your experience cure. Reading can eliminate many of the problems someone else had in your similar situation. Reading expands your mind and helps you to dream. Reading can be accomplished while standing in line or waiting for an order. I read somewhere that if you read about on topic for thirty min. every day for the next five years, on one topic, by the fifth year you would be an expert on that particular subject.
Write
Keep a note pad and when you have an idea where ever you are jot it down. After six months go back and read through your note pad. If you remember what you were writing about it is probably important to you. Not only is it important to write ideas down on note pads. It’s important to make lists of things needed to be accomplished, and to keep a calendar. It is also important to develop writing skills; it will help with person to person communication.
Investigate
Ask thousand of questions about the things you are interested in. When you do this you first do not come across as a know it all, and second, by asking questions people will begin to realize you are interested in one particular subject and lead you in the direction of answers. People will be on the look out for you. Say you wanted to change the local community center for the better. By asking questions people you know will lead you to where you want to be.
Speak
It is funny that when you share information how much more knowledgeable you become. (A side note: people’s number one fear is public speaking.) Many of the times the things that keep people from accomplishing goals is fear of success. By overcoming your fear of public speaking you are moving psychologically into a transition and therefore able to tear down the mental barrier that keeps you from becoming successful. It is not only important for you to speak but it is also important for you to listen to other speak.
How successful are you?
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