1st Construction Equipment Financing - Lease and Finance Construction Equipment

**Lease and Save**
Whenever the actual tax benefits of leasing equipment are combined with the conservation of capital which leasing provides... and to that amount, add the potential income that will be derived from the conserved capital... then without a doubt, leasing is definitely the cheaper method. This is fully demonstrated with the following example.

Cash Outlay
Buying Equipment		Leasing Equipment
Cost of Equipment	$35,000	Total Lease Payments $710 X 60 Months	$42,600
		Plus 10% Buy Out	$3,500
		Total Amount	$46,100

Cash Inflow
Buying Equipment		Leasing Equipment
Tax Savings... Using a 179 Deduction	$35,000	Tax Savings... Total Amount Paid	$46,100
Times Tax Rate	31%	Times Tax Rate	31%
Equals	$10,850	Equals	$14,292

Net Cost to Own Equipment
Buying Equipment		Leasing Equipment
Purchase Price...	$35,000	Total Lease Cost...	$46,100
Less Tax Savings	$10,850	Less Tax Savings	$14,292
Less Interest Earned	0	Less Interest Earned (6% Compounded Monthly)	$12,210
Net Cost	$24,150	Net Cost	$19,598

Total Assets Owned
Buying Equipment	Leasing Equipment
Equipment Only	Equipment Plus a Certificate of Deposit

The above example clearly demonstrates that when this company utilized leasing as a financial tool of leverage (while taking full advantage of the tax benefits that leasing provides) the actual overall cost of equipment will be considerably lower. As you can easily see in this particular example, by leasing the equipment this company saved a total of $4,552; which is a substantial sum.

Please Note: All tax related business decisions should be discussed with your tax advisor.

Lease and Save