Starting or Renovating

If you are starting a restaurant or you're a seasoned restaurant owner, you need restaurant equipment. If you're thinking of buying concerns come to your mind like cost, terms, quality, and convenience. Health and sanitation are at the forefront of keeping your restaurant open and in compliance with the health regulations of the health department. This means using better quality restaurant equipment.
Lower Initial Costs and Other Benefits

The capital you would invest without leasing your restaurant equipment can throw you off balance. But leasing lets you reduce your initial investment. When you start or renovate a restaurant there are other big expenses. But leasing restaurant equipment won't affect your banking lines, thus, most of your money is useable for the other expenses. Another good point about leasing is that though your equipment will depreciate, you can lease new equipment and the leasing company will move the old equipment for you at no cost and you don't have to buy any new equipment, which would be more expensive than leasing the newer items.
Restaurant Equipment

This is some of the restaurant equipment you can lease: griddles, grills, microwaves, ice machines, food warmers, fryers, bar equipment, furniture, electric slicers, paging systems and so on. The commercial ice machines, coffee makers, and dishwashers are three of the most leased items of restaurant equipment because they are considered more suited for leasing. Other items that are perfect for leasing are: towels, uniforms, floor mats, and linens.
What To Do When Leasing

* Get several quotes on pricing. What does the quote include? Monthly payments? Which services are included? How frequently will the leasing company service or clean the equipment? Do they deliver and assemble the equipment like the majority of companies?

* Check out if leasing is cheaper than buying new equipment; used equipment would be cheaper, but you normally won't get a warranty; leased equipment includes maintenance

* Reading the fine print is important; a lot of new restaurants go under in three years; a five year lease would hurt in this case

* Leasing restaurant equipment requires a credit check

* Look for coffee and beverage distributors that let you use the coffee maker, cooler or freezer for free, some do if you purchase their supplies

When you lease restaurant equipment and items you will have a bill, either weekly or monthly. You'll also be under contract, which you should carefully go over the contract and having your attorney review it with you before you sign is a good way to make sure you understand the terms of the equipment lease. Then you'll know if you want to agree to the terms or not.

Leasing restaurant equipment for your startup or for renovation of your existing establishment can be a good way to have the equipment you need. Just be careful, read the fine print, make comparisons of leasing offers, and you'll find the deal that you like and can agree to make.

As businesses prepare to compete and grow in a new millennium, many are searching for proven new ways to address their equipment financing challenge. The old ways won't meet today's and tomorrow's needs. The choice for many businesses is clear: equipment leasing. Equipment Leasing and Financing Association (ELFA) research shows that eight out of ten U.S. companies lease some or all of their equipment. And, nine out of ten say that they will use equipment leasing again. Of all the ways to acquire equipment, leasing is the method most frequently used for all equipment types. In fact, almost any type of equipment can be leased - from fax machines and printing presses, to trucks and bulldozers.

According to the U.S. Department of Commerce, U.S. businesses acquired approximately $582 billion in capital assets during 2002 and, of that, about $280 billion were leased. This translates to about 31% of all equipment as being acquired through leasing. ELFA predicts that leasing will continue to grow by at least 6% annually.

EQUIPMENT LEASING STRUCTURES

Equipment leases can be structured as:

• Capital/Finance Leases (For example: $1 or 10% Purchase Option)

• True/Operating Leases (For example: FMV Purchase Option)

• Municipal/Not-for-Profit Leases (Tax-Exempt)

It is important to point out that leases are not loans. As a result, their costs are figured differently from loans. To compare loan and lease products, it is better to compare monthly payments than to try to compare loan interest rates with lease rates. On a cost-of-capital basis, equipment leasing may be the least expensive option.

Equipment leasing companies can offer competitive rates for a number of reasons. Lessors - with their volume purchasing power - can secure attractive financing deals and pass along the savings to the lessee.

TYPES OF EQUIPMENT LEASES

Once you've completed your evaluation and decided to lease your next equipment acquisition, the first step is to select the type of lease that fits your needs.

When deciding which type of lease is best for your company, you should consult with your CPA/Accountant/Tax Advisor. It is important to keep in mind:

• How long you want to use the equipment

• What you intend to do with the equipment at the end of your lease

• Your tax situation

• Your cash flow

• Your company's specific needs as they relate to future growth

You also will need to determine what happens at the end of the lease.

To design an equipment leasing plan that best meets your needs, you need to understand your options. Discuss any questions or concerns you have with your lessor or tax advisor.

Determining if leasing is right for your business can be complex, but choosing a leasing partner doesn't have to be. Contact Advantage Leasing for flexible lease programs that work for your business.

Mike Elton is the Vice President of Sales for Advantage Leasing Corporation. Advantage Leasing is an equipment leasing company in Milwaukee, Wisconsin lending to business customers throughout the United States with financing needs valued between $5,000 and $200,000.

Setting up a new business? You need computers, copy machines, chairs and desks, waiting room furniture, telephones, computer software, electronics, and other equipment to get your new office started. But when you're just starting out, you don't want to tie up all your cash on these set up costs, and don't want to take out a bank loan if you can help it. The solution? Commercial equipment leasing.

Commercial equipment leasing is becoming an increasingly popular way for businesses to establish themselves when they don't want to pay cash and tie up their working capital. In fact, a recent study found that up to 80% of businesses in the United States, both Fortune 500 companies and smaller businesses, use equipment leasing. Commercial equipment leasing makes sense for new businesses because oftentimes, they are unable to apply for bank loans, as many financial institutions will not back companies just establishing themselves.

So how does commercial equipment leasing work, exactly? Basically, an equipment leasing company buys the equipment for you, and then you use it for an agreed period of time by paying a monthly fee. Often, leasing companies offer a range of flexible payment plans and options. At the end of the period, you can return the equipment, extend your lease, or buy the equipment from the commercial equipment leasing company. Commercial equipment leasing is used by businesses, as well as municipal agencies such state and federal government departments, armed services, public schools, libraries, police departments, and fire departments.

Commercial equipment leasing is a good option when you need to acquire items like computers and software that have a short life span. Technology is changing rapidly, and you don't want to tie yourself down with old equipment. So, rather than paying a lot of money up front for these items, and then having to replace them in just a few years, you can instead lease them for the required period, then lease or purchase new equipment down the track. Equipment leasing therefore gives you the flexibility to stay abreast of the latest technology and upgrade to newer models when your equipment is no longer performing at its best.

With commercial equipment leasing, you don't tie up your lines of credit, which means you can save your cash for unexpected events. You're also protecting your borrowing power so that you can apply for bank loans for other business needs and opportunities. Most commercial equipment leasing companies offer fixed monthly payments throughout t he term of the lease, so you know what you're getting into and won't be hit with the unexpected cost of skyrocketing interest rates.

When you pay cash to buy equipment outright, your investment becomes a profit, on which tax is payable. Commercial equipment leasing, on the other hand, can also offer significant tax and accounting savings: leasing can be counted as a pre-tax business expense, and can sometimes even result in a reduction of tax.

Setting a business brings along a lot challenges and as the owner, you need to be prepared to face up to them.  When it comes to matters of business financing, purchasing equipment can prove to be a problem since it requires a huge sum of money.  Thankfully, there is an alternative to purchasing equipment.  This is known as business equipment lease financing.

Lease financing is the perfect solution because it enables a business owner to stretch the available cash fund on other aspects of managing the business instead of spending a high percentage solely on equipment.

Equipment Lease – An Alternative to Business Loans

True, banks provide business loans that can be used in purchasing equipment.  However, getting approved for a bank loan is not always that easy.  This is especially true if you are an entrepreneur who has just started your company.

Banks and commercial lending companies generally impose rigid standards in financing new businesses.  Needless to say, lenders want to make sure that their customers will be able to pay back their loans according to their terms.  To apply for a business loan, you must be able to submit all the necessary paperwork and provide collateral as a guaranteed for your debts.  Even after completing all requirements, it might take some time before your funds get released.

On the contrary, the process of applying for a business equipment lease is more quick and easy.  If you are a new business or has been in operations for less than 2 years, then equipment lease financing can be a great help for you.  The important thing to remember is to find a lessor who can provide a lease program that complements your business.

Getting Approval for A Start-up or New Business Lease

What are the paperwork that you need to prepare when applying for equipment lease?  The specific requirements may vary depending on the leasing company.  Nevertheless, your personal financial statements, personal tax returns for the last 2 years, business plan, business summary, and lease proposal are basic requirements for many lease companies.

To ensure your approval, you must be able to show proof that you are managing a lucrative business and that you will be able to stay true to your repayment obligations.  Again, having a good personal credit history is a big factor but is not always necessary since you can find leasing companies that offer lease especially for people with bad credit. If you have a history of bad credit, don't forget to send a letter of explanation along with your lease application to give your lender background information about your credit situation.

Do not numerous requests to different equipment leasing companies at once.  Always look for a leasing company that provides service to new or start up businesses.  Remember, some lessors exclusively provide lease for established businesses.  Submitting your application to the wrong lease provider may only cause your application to be declined which could send out the wrong impression to other potential business equipment lease providers.

Lai Castillo is an equipment lease financing broker that specializes in getting start up business equipment lease.

Equipment leasing is intelligent decision making, especially when compared to bank loan financing or cash purchases. Investing cash reserves in equipment makes the business enterprise asset rich and cash poor. When a business is cash poor, it is severely limited in its ability to take advantage of new opportunities or to adequately respond to changing market conditions.

Today, more than 80% of all U.S. corporations lease some or all of their equipment. It is the use of equipment, not ownership of equipment that generates profits. This simple precept explains the rise of equipment leasing activity, especially as equipment life cycles shorten in this high-tech age. Whether opening a new business, expanding existing facilities or opening an additional location, the method you choose to acquire equipment can have a profound impact on your business, credit and cash flow.

Secret #1:

Virtually all types of equipment in almost any industry can be leased. Leases are specific. You can choose the manufacturer, the model number, the source and even accesories. You're covered by all conventional manufacturers' warranties. And because lease payments are usually lower than other forms of financing, your leasing dollar allows you to acquire more of the equipment your business needs or more advanced equipment. With an equipment lease, you get 100% financing so the amount of cash needed up-front is reduced. Most soft costs can be included: delivery charges, installation, training, and software to ensure that the equipment is productive immediately, speeding your return on investment.

Secret #2:

Bank loans can be dramatically more expensive than anticipated because of the large security deposit that is required. Down payments for bank loans will usually range between 20% and 40%. The result is that there is a tremendous difference between the effective APR and the stated APR. A stated 8% bank rate with a 25% down payment is actually equal to a 21% APR on a five year loan.

Secret #3

Even if you have the cash to purchase your equipment, purchasing is rarely, if ever, the best choice. With equipment leasing, cash can be used for other business requirements such as expanding sales, starting new marketing programs, offering quantity discounts, replenishing inventories, opening a new line of business, or increasing cash reserves. Using cash for necessary business expenses that cannot be financed is much more intelligent decision-making than spending it on equipment that is worth less and less as time goes by. Not only are there higher payments for traditional financing, but you'll have to come up with the entire amount for a cash purchase or a substantial down payment with a bank loan if you decide not to lease.

Secret #4

With the lower, fixed-rate payments of an equipment lease, you're protected against inflation. Cash outlays are deferred, as compared to an up-front purchase. In the future, 'cheaper' dollars will be making your lease payments as inflation lessens your cost. You will be making your monthly payments to the leasing company with ever-inflating dollars during the term of the lease. This actually reduces the cost of financing to you in real dollars, a tremendous advantage that is often overlooked.

Secret #5:

Leasing equipment offers a wide range of benefits, from consistency with expenses to increased cash flow. But perhaps the most significant advantage of leasing is the ability to maintain up-to-date equipment. Leasing allows you to easily and affordably add equipment or upgrade to a completely new piece of machinery to meet future needs. This lets you transfer the risk of being caught with obsolete equipment to the leasing company.

Secret #6:

With the scheduled updating of your business equipment offered through equipment leasing, you can maintain a competitive edge, keeping you ahead of your competition. With an equipment lease, upgrading to newer technology during or after the lease is easy. In contrast, when equipment is purchased with cash or bank financing, there is an incentive to postpone any upgrade until the original investment has been recouped through depreciation, which hinders your flexibility. A planned replacement program avoids obsolescence and keeps you up to date with the latest state-of-the-art technology. An additional, often-overlooked disadvantage of ownership is equipment disposition. Ownership of equipment, the result of the full repayment of bank loans or cash purchases, includes several additional costs that are significant and can be avoided with leasing. These costs are associated with removal, environmental fees for disposal (for certain equipment categories, such as computers) and the costs of remarketing.

In summary, there are many 'Secrets of Equipment Leasing' that require significant research to uncover. These 'Secrets' can be determining factors in the survival and profitability of any business enterprise. As such, they warrant in-depth consideration to determine their potential contributions to every individual equipment acquisition situation. Nearly 100% of the time, bank loans and cash purchases are always significantly less beneficial and less advantageous than equipment leasing.

Milton Franklin, is a Founder of Nationwide Equipment Leasing LLC, an equipment leasing company that also offers Unsecured Business Lines of Credit. His company provides solutions to the current economic and financial crisis in the United States He can be reached at 800-395-4908. Go to http://www.neleasing.com/application-form.cfm and request Leasing Information to receive a free copy of his eBook, 'Secrets of Equipment Leasing'.