For a new business, trying to get a bank loan can be a challenge especially without business credit history to back up your loan application. If you need equipment financing is an issue, perhaps you may consider business equipment leasing?
Who Can Lease
Both new and established businesses are eligible to apply for equipment lease financing. In fact, this financing technique has been employed by many small businesses and large corporations for a long time.
Why Lease Equipment
Rather than apply for a bank loan to buy the needed equipment, a new business owner can apply for a lease to avoid unnecessary delays with the business operations. Instead of waiting for months to get their business loan approved, leasing equipment involves a quicker and uncomplicated procedure.
Add to this, equipment lease financing is generally cheaper since it does not require a down payment. Many leasing companies offer flexible repayment terms (monthly, quarterly, bi-annual, annually) to complement the business's needs.
Indeed, equipment lease financing is recommended for smaller businesses. By leasing equipment, the business owner can use its working capital on other expenditures such as purchasing supplies, hiring workers, advertising your products and services, instead of spending the money on devices or special machines.
Preparing Paperwork
What kind of paperwork do you need to prepare? The specific requirements may vary from one leasing firm to the next. Still, most lessors generally require a written equipment lease proposal, the business's recent financial statements, and tax returns.
Your lease proposal must clearly present the type of business you run, your reason for getting a lease, the specific machines or devices you need, and other important information about your company that will help convince your lessor to approve your application.
Check Your Credit
Some business equipment lease providers have strict standards and may call for good to excellent credit history. Nonetheless, you can find lessors that offer leasing services even for customers with no credit history or with bad credit history.
In fact, even business owners who have a record of bankruptcy can get approved as long as the bankruptcy has been discharged. If you have bad credit, it is a good idea to include a letter explaining the details about your bankruptcy or poor credit.
Tips For Sure Approval
For new business owners, do not test the waters by submitting multiple lease applications to different companies. If a potential lessor sees too many inquiries in your report, it may raise doubt as to why other lessors are not willing to grant you a lease.
Keep in mind that not all leasing companies offer lease for new businesses. Some lessors may require applicants to be at least 2 years in operations. However, there are lease companies that do offer special lease arrangements for new businesses.
Find a leasing company that provides service to businesses in the market you belong. For example, some lessors specialize in transportation while others may specialize in medical equipment, printing equipment, baking equipment, etc. Check the prerequisites of a particular equipment lease provider so you can avoid unnecessary rejection.
Showing posts with label Equipment. Show all posts
Showing posts with label Equipment. Show all posts
Friday, November 9, 2012
Saturday, September 22, 2012
Essential Information For Equipment Leasing And Finance
Are you planning for to get equipment finance for your business?This article presents essential information for businesses that plan to apply for equipment lease financing. Read carefully, follow the details given below and avoid unnecessary complications.
Equipment Leasing is opposed to straight financing. It is an alternative financing method to acquire needed business equipment. In real essence, you only pay for the depreciation of the equipment over a given time frame. At the end of the lease you either purchase the depreciated asset or trade it for a new lease and new equipment. It allows a company to hold on to valuable cash capital and use the profits the equipment generates to pay for itself over time with added tax advantages.
What is a typical business mind-set? It will always say that equipment leasing is for companies that are short of capital. However, research would indicate that even the largest of companies use leasing finance to guarantee fixed costs and access essential equipment. Along with this you also get either corporate or personal guarantees. A corporate guarantee means that if the lease goes into default, the leasing company can take possession of the equipment and liquidate it to settle the lease balance. A personal guarantee is identical to a corporate guarantee except a person's property may be used to satisfy the lease balance.
With regard to leasing payments and purchase, the monthly payments are lower. At the end of the lease term, a single payment is due that equals several months of combined payments. On the other hand, a lease purchase is financing the equipment by any other name. It allows the business to deduct the lease payments from taxes as a business expense. Also equipment depreciation can be used as a tax deduction.
In many cases it may possible to lease any type of equipment without the need for a deposit or extra security. Few of the benefits that you will be enjoying with equipment finance is that no funding is required, payment terms will be flexible and transaction speed is great,most popular being is cost.
Equipment Leasing is opposed to straight financing. It is an alternative financing method to acquire needed business equipment. In real essence, you only pay for the depreciation of the equipment over a given time frame. At the end of the lease you either purchase the depreciated asset or trade it for a new lease and new equipment. It allows a company to hold on to valuable cash capital and use the profits the equipment generates to pay for itself over time with added tax advantages.
What is a typical business mind-set? It will always say that equipment leasing is for companies that are short of capital. However, research would indicate that even the largest of companies use leasing finance to guarantee fixed costs and access essential equipment. Along with this you also get either corporate or personal guarantees. A corporate guarantee means that if the lease goes into default, the leasing company can take possession of the equipment and liquidate it to settle the lease balance. A personal guarantee is identical to a corporate guarantee except a person's property may be used to satisfy the lease balance.
With regard to leasing payments and purchase, the monthly payments are lower. At the end of the lease term, a single payment is due that equals several months of combined payments. On the other hand, a lease purchase is financing the equipment by any other name. It allows the business to deduct the lease payments from taxes as a business expense. Also equipment depreciation can be used as a tax deduction.
In many cases it may possible to lease any type of equipment without the need for a deposit or extra security. Few of the benefits that you will be enjoying with equipment finance is that no funding is required, payment terms will be flexible and transaction speed is great,most popular being is cost.
Thursday, September 20, 2012
Service Tax On Equipment Leasing And Hire-purchase
Surender Kumar Jain
This article makes a comprehensive analysis of the decision of the High Court in Kerala Non-banking Finance Companies Welfare Association v. Union of India [2009] 20 STT 1, wherein a recent issue as to : whether charging of service tax on banking and other financial services which include equipment leasing and hire-purchase, is unconstitutional, has been considered.
1-Vide section 137 of the Finance Act, 2001 service tax is introduced on Banking and other financial services' which include equipment leasing and hire-purchase'. The impugned provisions providing for service tax on Equipment leasing and hire-purchase transactions' are introduced by amending the Finance Act, 1994. The relevant definition of Banking and other financial services' is contained in clause (12) of section 65 of the Finance Act, 1994. Along with the introduction of the definition of Banking and other financial services', the charging section, namely, section 66 of the Finance Act, 1994 is also amended to cover tax on value of taxable services referred to in sub-clause (zm) of section 65(105). The question as to whether charging of service tax on Banking and other financial services', which include equipment leasing and hire-purchase, is unconstitutional, arose for consideration of the Kerala High Court in the case of Kerala Non-Banking Finance Companies Welfare Association v. Union of India [2009] 20 STT 1.
2 - The petitioner No. 1, an association of non-banking financial companies, which was covered under the definition of Banking and other financial services', and its two members, viz., petitioner Nos. 2 and 3 had filed a writ petition challenging the constitutional validity of the impugned provisions of section 137.
3 - These are discussed as under :
(a)- The Parliament has no authority to legislate on hire-purchase and leasing transactions which are subjects left for levy of sales tax by the States under entry 54 of List II of the Seventh Schedule to the Constitution of India.
(b)- After the 46th Amendment to the Constitution introducing clauses (29A)(c) and (d) to article 366, States are authorised to provide for sales tax among other things on hire-purchase and leasing transactions.
(c)- As a follow-up measure, all the States including the State of Kerala introduced provisions in the respective Sales Tax Acts authorising levy of sales tax on hire-purchase and leasing transactions.
(d)- Impugned provisions for levy of service tax on hire-purchase and leasing transactions are discriminatory and violative of articles 14 and 19(1)(g) of the Constitution.
4 - These are as follows :
(a)- Even though service tax is payable on the value of taxable service pertaining to leasing and hire-purchase transactions, the Government of India had vide Notification No. 4/2006-ST, dated March 1, 2006 granted exemption on 90 per cent representing interest income earned by the service provider.
(b)- The Supreme Court had upheld the legislative competence of the Parliament to levy service tax under the residuary entry 97 to List I of the Seventh Schedule in the decisions in Tamil Nadu Kalyana Mandapam Association v. Union of India [2006] 4 STT 308, C.K. Jidheesh v. Union of India [2005] 2 STT 242 and Gujarat Ambuja Cements Ltd. v. Union of India [2005] 1 STT 41 and thereafter, through constitutional amendments entry 92C to List I of the Seventh Schedule and article 268A are introduced expressly giving authority to the Parliament to legislate on service tax.
(c)- The validity of legislation and the grievances of the petitioners should be considered with reference to the aforesaid Notification No. 4/2006-ST, dated March 1, 2006, by which rigour of the levy was neutralized by granting exemption on 90 per cent of the charges received in the hire-purchase and leasing transactions, thereby completely excluding interest on loans from service tax.
5 - It is well-settled that the Constitution by virtue of the provisions contained in article 366(29A) authorises, levy of sales tax on hire-purchase transactions and on leasing of goods and based on the same there is State legislation authorising it.
6 - The legislation applies to all engaged in banking and other financial services and is not confined to members of the first petitioner. In fact, banking companies in the public Sector are also liable to pay service tax on financial leasing service including equipment leasing and hire-purchase . Since the petitioners had not established the parties engaged in the same business who were left out and how they were discriminated, the contention was to be rejected. Similarly provisions of service tax do not take away or create any unreasonable restriction on the fundamental rights of the members of the first petitioner including petitioner Nos. 2 and 3 to carry on business. Therefore, the allegation of violation of article 19(1)(g) also, did not merit consideration.
7 -There is no conflict between the levy of sales tax on the sale or deemed sale of vehicle under the hire-purchase agreement and the service tax payable on services rendered by the financier under the hire-purchase agreement. The provisions contained in article 366(29A) of the Constitution authorising levy of sales tax on the supply of goods under the hire-purchase agreement does not stand in the way of the Parliament levying service tax on taxable service charges received in respect of hire-purchase transactions by the financiers.
It is obvious that levy of sales tax is possible on sale of goods involved in the transactions while service tax can be levied on the service charges received in the transactions. Further, the provisions pertaining to levy of service tax on hire-purchase or lease transactions are not in any way different from the service tax authorised for the large number of transactions under the Finance Act, 1994, the constitutional validity of which is upheld by the Supreme Court. Since incidence of service tax is not on sale of goods or deemed sale of goods pertaining to leasing and hire-purchase transactions covered by clauses (c) and (d) of article 366(29A), the Parliament has authority to authorise levy of service tax on banking and other financial services including equipment leasing and hire-purchase.
This article makes a comprehensive analysis of the decision of the High Court in Kerala Non-banking Finance Companies Welfare Association v. Union of India [2009] 20 STT 1, wherein a recent issue as to : whether charging of service tax on banking and other financial services which include equipment leasing and hire-purchase, is unconstitutional, has been considered.
1-Vide section 137 of the Finance Act, 2001 service tax is introduced on Banking and other financial services' which include equipment leasing and hire-purchase'. The impugned provisions providing for service tax on Equipment leasing and hire-purchase transactions' are introduced by amending the Finance Act, 1994. The relevant definition of Banking and other financial services' is contained in clause (12) of section 65 of the Finance Act, 1994. Along with the introduction of the definition of Banking and other financial services', the charging section, namely, section 66 of the Finance Act, 1994 is also amended to cover tax on value of taxable services referred to in sub-clause (zm) of section 65(105). The question as to whether charging of service tax on Banking and other financial services', which include equipment leasing and hire-purchase, is unconstitutional, arose for consideration of the Kerala High Court in the case of Kerala Non-Banking Finance Companies Welfare Association v. Union of India [2009] 20 STT 1.
2 - The petitioner No. 1, an association of non-banking financial companies, which was covered under the definition of Banking and other financial services', and its two members, viz., petitioner Nos. 2 and 3 had filed a writ petition challenging the constitutional validity of the impugned provisions of section 137.
3 - These are discussed as under :
(a)- The Parliament has no authority to legislate on hire-purchase and leasing transactions which are subjects left for levy of sales tax by the States under entry 54 of List II of the Seventh Schedule to the Constitution of India.
(b)- After the 46th Amendment to the Constitution introducing clauses (29A)(c) and (d) to article 366, States are authorised to provide for sales tax among other things on hire-purchase and leasing transactions.
(c)- As a follow-up measure, all the States including the State of Kerala introduced provisions in the respective Sales Tax Acts authorising levy of sales tax on hire-purchase and leasing transactions.
(d)- Impugned provisions for levy of service tax on hire-purchase and leasing transactions are discriminatory and violative of articles 14 and 19(1)(g) of the Constitution.
4 - These are as follows :
(a)- Even though service tax is payable on the value of taxable service pertaining to leasing and hire-purchase transactions, the Government of India had vide Notification No. 4/2006-ST, dated March 1, 2006 granted exemption on 90 per cent representing interest income earned by the service provider.
(b)- The Supreme Court had upheld the legislative competence of the Parliament to levy service tax under the residuary entry 97 to List I of the Seventh Schedule in the decisions in Tamil Nadu Kalyana Mandapam Association v. Union of India [2006] 4 STT 308, C.K. Jidheesh v. Union of India [2005] 2 STT 242 and Gujarat Ambuja Cements Ltd. v. Union of India [2005] 1 STT 41 and thereafter, through constitutional amendments entry 92C to List I of the Seventh Schedule and article 268A are introduced expressly giving authority to the Parliament to legislate on service tax.
(c)- The validity of legislation and the grievances of the petitioners should be considered with reference to the aforesaid Notification No. 4/2006-ST, dated March 1, 2006, by which rigour of the levy was neutralized by granting exemption on 90 per cent of the charges received in the hire-purchase and leasing transactions, thereby completely excluding interest on loans from service tax.
5 - It is well-settled that the Constitution by virtue of the provisions contained in article 366(29A) authorises, levy of sales tax on hire-purchase transactions and on leasing of goods and based on the same there is State legislation authorising it.
6 - The legislation applies to all engaged in banking and other financial services and is not confined to members of the first petitioner. In fact, banking companies in the public Sector are also liable to pay service tax on financial leasing service including equipment leasing and hire-purchase . Since the petitioners had not established the parties engaged in the same business who were left out and how they were discriminated, the contention was to be rejected. Similarly provisions of service tax do not take away or create any unreasonable restriction on the fundamental rights of the members of the first petitioner including petitioner Nos. 2 and 3 to carry on business. Therefore, the allegation of violation of article 19(1)(g) also, did not merit consideration.
7 -There is no conflict between the levy of sales tax on the sale or deemed sale of vehicle under the hire-purchase agreement and the service tax payable on services rendered by the financier under the hire-purchase agreement. The provisions contained in article 366(29A) of the Constitution authorising levy of sales tax on the supply of goods under the hire-purchase agreement does not stand in the way of the Parliament levying service tax on taxable service charges received in respect of hire-purchase transactions by the financiers.
It is obvious that levy of sales tax is possible on sale of goods involved in the transactions while service tax can be levied on the service charges received in the transactions. Further, the provisions pertaining to levy of service tax on hire-purchase or lease transactions are not in any way different from the service tax authorised for the large number of transactions under the Finance Act, 1994, the constitutional validity of which is upheld by the Supreme Court. Since incidence of service tax is not on sale of goods or deemed sale of goods pertaining to leasing and hire-purchase transactions covered by clauses (c) and (d) of article 366(29A), the Parliament has authority to authorise levy of service tax on banking and other financial services including equipment leasing and hire-purchase.
Sunday, August 19, 2012
Off Lease And Repo Commercial, Work Trucks And Construction Equipment For Public Sale With Dealer Leasing.
In today's present day's unbalanced economy, the start up and experienced business has a rare occasion to buy an advantageous deal for off lease and repossessed commercial, work trucks and construction equipment for auction with dealer banking. Due to a contracting market, many banks have extra inventories on their books that they want to put furnish on the street. These in-house inventories are non income producing, therefore putting strain on the bank to make a deal with the consumer. These deals can be originate in the cost, the leasing or a combination of both.
An off lease commercial vehicle and/or cementequipment has been brought back to the financial institution as the lease has termnated. The lessee has made a assessment to return the item in lieu of excercising the buyout opportunity. A repo has arisen due to a failure to pay of the lessee for non payment conditions or a breach of the provisions of the lease. Either way, the bank has taken these trucks and/or equipment back and it is necessary to put them back into working order and either retail these work, commerical trucks and construction equipment or re-lease them. The financial institution will either advertise their listing through their internal sales force or outside professionals such as brokers to reposition their inventories as fast asachievable. At times as these inventories either sit or whatever reason isn't moving, the financial institution could put these items up for sale.
For this commentary, the form of items we are going to make out as prospective deals for the patron is the following
Dump trucks, boom trucks trucks, grapple and landscape trucks, fuel and lube trucks, bucket and concrete trucks, over the road and day cabs, water trucks, tow trucks, box vans and straight trucks, dry van and drop deck trailers, conclusion and bottom dump trailers, flatbed trailers, backhoes, bulldozers, crawler tractors, forestry equipment, excavators, backhoes, and other type loaders.
A quantity of of the ways the startup and/or experienced business can obtain these deals are through trade publications, surfing internet search engines, contacting lease brokers for information and speaking to lenders directly.
A quantity of the financial institutions in the marketplace have advertised personal credit qualifications. as little as 550, former bankruptcy rules amended or overlooked and startups acceptable. In addition, the front means to commence the lease can commence as little as first payment to whatever you might able to reach a deal.
In ending, this is a buyers marketplace for commercial and work trucks, commercial trailers, and construction equipment. Check out all the opportunities in the marketplace and make sure that you have a stable income base to assume anything debt that you could occur.
Happy hunting for your commercial truck and construction equipment acquistion and its related financing.
An off lease commercial vehicle and/or cementequipment has been brought back to the financial institution as the lease has termnated. The lessee has made a assessment to return the item in lieu of excercising the buyout opportunity. A repo has arisen due to a failure to pay of the lessee for non payment conditions or a breach of the provisions of the lease. Either way, the bank has taken these trucks and/or equipment back and it is necessary to put them back into working order and either retail these work, commerical trucks and construction equipment or re-lease them. The financial institution will either advertise their listing through their internal sales force or outside professionals such as brokers to reposition their inventories as fast asachievable. At times as these inventories either sit or whatever reason isn't moving, the financial institution could put these items up for sale.
For this commentary, the form of items we are going to make out as prospective deals for the patron is the following
Dump trucks, boom trucks trucks, grapple and landscape trucks, fuel and lube trucks, bucket and concrete trucks, over the road and day cabs, water trucks, tow trucks, box vans and straight trucks, dry van and drop deck trailers, conclusion and bottom dump trailers, flatbed trailers, backhoes, bulldozers, crawler tractors, forestry equipment, excavators, backhoes, and other type loaders.
A quantity of of the ways the startup and/or experienced business can obtain these deals are through trade publications, surfing internet search engines, contacting lease brokers for information and speaking to lenders directly.
A quantity of the financial institutions in the marketplace have advertised personal credit qualifications. as little as 550, former bankruptcy rules amended or overlooked and startups acceptable. In addition, the front means to commence the lease can commence as little as first payment to whatever you might able to reach a deal.
In ending, this is a buyers marketplace for commercial and work trucks, commercial trailers, and construction equipment. Check out all the opportunities in the marketplace and make sure that you have a stable income base to assume anything debt that you could occur.
Happy hunting for your commercial truck and construction equipment acquistion and its related financing.
Saturday, May 26, 2012
Essential Information For Equipment Leasing And Finance
Are you planning for to get equipment finance for your business?This article presents essential information for businesses that plan to apply for equipment lease financing. Read carefully, follow the details given below and avoid unnecessary complications.
Equipment Leasing is opposed to straight financing. It is an alternative financing method to acquire needed business equipment. In real essence, you only pay for the depreciation of the equipment over a given time frame. At the end of the lease you either purchase the depreciated asset or trade it for a new lease and new equipment. It allows a company to hold on to valuable cash capital and use the profits the equipment generates to pay for itself over time with added tax advantages.
What is a typical business mind-set? It will always say that equipment leasing is for companies that are short of capital. However, research would indicate that even the largest of companies use leasing finance to guarantee fixed costs and access essential equipment. Along with this you also get either corporate or personal guarantees. A corporate guarantee means that if the lease goes into default, the leasing company can take possession of the equipment and liquidate it to settle the lease balance. A personal guarantee is identical to a corporate guarantee except a person's property may be used to satisfy the lease balance.
With regard to leasing payments and purchase, the monthly payments are lower. At the end of the lease term, a single payment is due that equals several months of combined payments. On the other hand, a lease purchase is financing the equipment by any other name. It allows the business to deduct the lease payments from taxes as a business expense. Also equipment depreciation can be used as a tax deduction.
In many cases it may possible to lease any type of equipment without the need for a deposit or extra security. Few of the benefits that you will be enjoying with equipment finance is that no funding is required, payment terms will be flexible and transaction speed is great,most popular being is cost.
Equipment Leasing is opposed to straight financing. It is an alternative financing method to acquire needed business equipment. In real essence, you only pay for the depreciation of the equipment over a given time frame. At the end of the lease you either purchase the depreciated asset or trade it for a new lease and new equipment. It allows a company to hold on to valuable cash capital and use the profits the equipment generates to pay for itself over time with added tax advantages.
What is a typical business mind-set? It will always say that equipment leasing is for companies that are short of capital. However, research would indicate that even the largest of companies use leasing finance to guarantee fixed costs and access essential equipment. Along with this you also get either corporate or personal guarantees. A corporate guarantee means that if the lease goes into default, the leasing company can take possession of the equipment and liquidate it to settle the lease balance. A personal guarantee is identical to a corporate guarantee except a person's property may be used to satisfy the lease balance.
With regard to leasing payments and purchase, the monthly payments are lower. At the end of the lease term, a single payment is due that equals several months of combined payments. On the other hand, a lease purchase is financing the equipment by any other name. It allows the business to deduct the lease payments from taxes as a business expense. Also equipment depreciation can be used as a tax deduction.
In many cases it may possible to lease any type of equipment without the need for a deposit or extra security. Few of the benefits that you will be enjoying with equipment finance is that no funding is required, payment terms will be flexible and transaction speed is great,most popular being is cost.
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