IRS Section 179
Business owners who acquire equipment including machinery, computers, and other tangible goods, usually prefer a substantial deduction in a single tax year, rather than a little at a time over a number of years. This accelerated deduction is known by its section in the tax code: a Section 179 deduction. The 2009 law extends the amount of qualified property that a business can expense under Section 179 to $250,000.This incentive is for equipment placed in service by December 31, 2009 and is designed for small companies, so the deduction phases out when a business purchases more than $800,000 in one year. (Companies cannot write off more than their taxable income).
PRESERVATION OF CREDIT
*Due to the fact that an equipment lease is not a loan, a client actually increases their borrowing capacity. Leasing is actually a NEW credit source, which allows a client to preserve and/or maximize their ability to obtain an unsecured loan or unsecured line of credit.
PRESERVATION OF CAPITAL
*A client’s valuable capital is preserved by an equipment lease; capital can then be used for many other company uses (increasing inventories, expanding sales, etc.). The average return on capital in business is 18% AFTER taxes.
MAINTAIN A COMPETITIVE EDGE
*Utilizing an equipment lease allows the client the opportunity to maintain the most current equipment available by replacing obsolete equipment periodically.
TAX BENEFITS
*Generally speaking, 100% of an equipment lease can be expensed where normally only the interest portion of bank financing would be eligible.
WHY CLIENTS LEASE EQUIPMENT
* A client utilizes an equipment lease because leasing represents the best use of their financial resources. A client which does not lease operates at a competitive disadvantage. A client would deny themselves the productivity-enhancing benefit of better equipment which they could otherwise obtain. A client would operate with older equipment than they could otherwise afford. Ultimately, a client may lose the ability to compete, having higher costs and lower productivity than better-equipped operations.
Items that can be Leased
*New and used equipment
*Municipal services equipment
*Food processing equipment
*Packaging equipment
*Agricultural equipment
*Manufacturing and processing equipment
*Printing and pre-press equipment
*Medical and dental equipment
*Office furniture
*Computer equipment
*Machine tools
*Material handling equipment
*Construction equipment
*And more
According to the State of the Equipment Finance Industry report, in 2009, end-users will lease approximately $672 billion of their nearly $1.19 trillion of equipment and software investment. End-users are expected to lease the same percentage of their equipment investment in 2009 as in 2008, resulting in a year-over-year increase in both equipment investment and lease volume of 3.1 percent.
Nationwide Unsecured has the nation's premier equipment leasing and unsecured loan/line of credit options. Whether you're a vendor looking for competitive rates and flexible financing for your customers, or a business owner who recognizes the advantages of equipment leasing, Nationwide Unsecured is the partner you need in today's competitive world. Nationwide Unsecured is Your Small Business Resource Center. Apply on-line now.
