Which Programs Are Used By Heavy Equipment Financing Companies?

Heavy equipment financing companies are currently making it big in the leasing industry. The main reason they have managed to realize success is the fact that they have flexible programs that suit almost every type of business.

heavy equipment financing companiesThe current economy is unpredictable because it fluctuates every so often. With a fluctuating economy and new technology, heavy equipment financing companies have changed the way that they compete for business. Capital equipment lease financing is a booming industry and many equipment leasing companies have designed programs that turn prospects into customers. Most of these leasing companies have customized, well-developed leasing plans that can make the difference between losing an opportunity and closing a deal. What therefore are some of these programs?

Programs Used By Heavy Equipment Financing Companies

Most heavy equipment financing companies have tailor based financing solutions to meet your business growth strategy. Some of the customized finance products that you can expect to find include:

  1. progress payment plans
  2. skipped and deferred payment plans
  3. graduated payment plans
  4. Upgrade and conversion lease
  5. Bundled financing for equipment training, and installation.

Most customized plans by various equipment financing companies will help you increase market penetration and increase company sales.

Leasing heavy equipment is financially advantageous, flexible and convenient. With different end of term options and payment structures to choose from, financing companies can structure the right lease to fit your business’ needs. With every lease product, you can access:

  1. Potential tax benefits
  2. End of lease options and flexible payment plans
  3. A team of professionals who can understand the unique needs of your business.
  4. Low monthly payments
  5. Access to capital to help you expand your market capabilities.

Types Of Leases

Most heavy equipment financing companies have a number of different types of leases but the most common ones are the fair market value lease and the purchase option lease.

Fair Market Value Lease

This is a very good choice if you expect the value of your equipment to depreciate. It is also suitable for businesses that use equipment that needs to be upgraded often. This is because this type of a lease allows business owners to upgrade their equipment at the end of the lease period.

At the end of your lease term, you can either return the equipment or purchase it at fair market value. Since a fair market lease is considered an operating lease, 100% of the lease payments are usually expensed.

One of the benefits of the fair market leases is the fact that you get to enjoy:

  1. Tax deductible payments
  2. Upgrade flexibility
  3. Your business is immune to equipment obsolescence
  4. Low monthly payments

$1 Purchase Option Lease

Heavy equipment financing companies will offer you this lease if you wish ownership of the equipment transferred to you. This lease allows for affordable monthly payments, interest and depreciation deductions and tax benefits. At the end of the lease, you can purchase the equipment at $1 without any further obligation.

Customized Leases

An example of a customized lease is a skip lease. This is most suitable for seasonal businesses such as farming businesses. The skip lease allows you to skip payments at certain times of the year when there is no significant revenue being generated. Other examples of customized leases include those that allow you to pay a low amount of money at the start of the lease.

There are also the graduated payment plans that match how much your business generates and your current cash flow situation. The main point here is that heavy equipment financing companies offer a variety of flexible financing structures to meet your tax requirements, budgeting, and cash flow.

Payment Structures

Step Payment Plans

This is an excellent plan suitable for start up businesses that are only able to make small payments. This program offers business owners the opportunity to begin their lease period with small payments and as they grow, the lease payments start to increase.

90 Day Deferred

Heavy equipment sometimes may not be as easy to operate at first so it may not generate some revenue for you within the first 3 months. Some heavy equipment leasing companies can defer their payments for 90 days.

Seasonal Payments

Some businesses such farming are seasonally sensitive and the only time income is generated is during certain times of the year. Leasing companies can arrange a payment schedule that allows you to make lease payments in accordance with how your sales peak and valley.

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