WHY NOT JUST GO TO THE BANK?

Equipment Lease vs. Bank Loan

Banks charge lower interest rates than equipment leasing companies, don't they? Well, not exactly. That's because a rate, per se, the cost per thousand dollars of equipment per month or the "interest rate" that is being factored into the transaction is an unimportant consideration.

Far more important for equipment leasing are the actual terms and conditions of the transaction. Leasing equipment is much simpler and better for business versus out right purchase.

Explanation of Equipment Leasing and Equipment Finance

Leasing equipment is less of a headache. Typically, typical lease contracts finances as much as 110% of the equipment cost because it picks up delivery, installation and other soft costs. And equipment leasing only requires one month's rent in advance. There is a UCC filing only against the specific equipment leased and the leasing company won't bother you for the next five years as long as you make your payments. At the end of the equipment lease, they will sell you the leased equipment for the current fair market value (probably minimal). Lastly, you can expense the equipment lease payments directly for tax purposes.

Belgium HotelsReasons to Come to Union Capital for Our Leasing Equipment

Stavanger luxury hotels Unlike equipment leasing, a bank loan at a "lower" interest rate usually requires that you keep 30% of the loan amount in compensating balances in a non-interest bearing account at that bank (so the bank is really lending 70 cents of their money and 30 cents of your own money). When you compute the real yield on that, you find that an 8.5% loan is really a 25% loan (because you're paying interest on 100%, but only getting 70%).

Using the same formula, a 20% compensating balance yields almost 19% and a 10% compensating balance about 14%. Equipment leasing and equipment finance options from Union Capital is a more cost-effective way to handle business.