When an organization wants to purchase assets they sometimes choose to lease assets rather than buy them out right. This type of financing offers many advantages to an organization, but they should keep in mind how the proposed lease will affect their overall financial position. The two kinds of leases that an organization can choose from is an operating lease or a capital lease. Both of these leases will in effect provide financing in order to acquire an asset, but the effects of each are accounted for differently and are reflected differently in organization’s financial statements.

An operating lease is the straightest forward of the two. The lessee (the organization) makes an agreement with the lessor (seller of the asset) for the use of an asset. Basically the organization is renting the asset with an installment payment (which usually includes interest) with intentions to return the asset when the lease ends. An example of an asset that would be commonly financed with an operating lease is new technology. Because technology is going to change, it is often better to lease the asset rather than commit large sums of an origination’s capital to an asset that is going to need to be upgraded every couple of years. The accounting for operating leases is quite simple. Because an organization does not own the asset, it is not recorded on the firm’s balance sheet. The only effect that an operating lease has on organization’s financial statements is the lease payments will appear as an operating expense on the entity’s income statement. Since an operating lease is not recorded on the balance sheet, it is sometimes referred to as off balance sheet financing. The main advantage of an operating lease is that the organization can use the asset without the usual attributes of ownership (i.e. the liability that would come with financing an asset and the depreciation expense that would come with an owned asset). Another advantage of an operating lease is that since it is not treated as a liability the organization will maintain their current access to capital. That is because the lease payments are not treated as debt and this helps the organization to maintain their current debt capacity. Thus the organization is able to use the asset to produce revenue, and is able to maintain its current access to the capital markets through debt. (more…)

Personal Contract Hire or PCH is one of the most popular options available when it comes to leasing a vehicle for personal use. If you have never entered into a leasing agreement before, you may not be familiar with the term. If this is the case, then you may not know if it would be the right choice for you or not. Many new clients get confused at first because the lesser may ask the following question. Do you want a lease or a Personal Contract Hire?

You may be wondering what the difference is between the two but, feel a little embarrassed having to ask that question when you’re on the verge of entering into a contract with a leasing company. Still, it would be difficult to know how to answer if you don’t ask. It can also be very frustrating unless you understand what you’re actually being asked.

Fortunately, it’s not as complicated as it may sound because some of the leasing terminology can get a little confusing. Once you know what the terms mean, it will be easy to answer any question you’re asked. The main reason this question gets confusing is because in essence, the PCH is simply a type of leasing option. Therefore, if you’re asked, do you want to choose a lease or a Personal Contract Hire, you’ll basically being asked which type of leasing contract would you like to take out. (more…)

When it comes to Ford car leasing, you have several options to choose from. One of the things that you will have to decide is how long you want the contract to run. Most people will usually take out a lease for two, three or four years but longer or shorter terms can be arranged. This is something that you’ll need to think about and decide before you take out your lease and it’s something that you should consider carefully.

In order to determine how long you should lease your next Ford, you need to ask yourself a few questions. Start by taking a good look at your financial situation. How long can you really afford to lease the vehicle? Normally, a shorter lease means lower payments because the vehicle will not depreciate in value as much in one year as it will in two or three. Since the overall cost of the leasing agreement is partly determined by the depreciating value, this is an important question.

The next thing to ask yourself is what do you plan to do at the end of the leasing contract? If you give the vehicle back, you’ll be without transportation unless you have already made other arrangements. Of course, you could always opt to purchase the Ford that you’re leasing or lease another one. Nevertheless, this is something that you need to consider before you lease the vehicle. Otherwise, you may find yourself trying to figure out what to do at the end of the lease. Plus, it will give you an idea of how long you actually need the leased vehicle. (more…)

When you need a new van you have a big decision to make. Do you buy or lease your next van? Which option provides you with the most benefits? The answer to this question will mostly depend on your personal and financial situation but knowing what both options have to offer will help you make the right decision.

Most everyone is familiar with buying a vehicle and the process that it requires so you most likely already know what benefits it has to offer. On the other hand, leasing vans is a fairly new concept and not everyone knows what great benefits it can provide. Therefore, some of these are listed below:

· You have the option of driving a new van every few years.

· The monthly payments are usually lower than what you’ll pay when buying.

· Vans don’t depreciate as quickly as cars so, this makes it possible for you to pay a low upfront cost.

· There are different leasing options available making it possible to choose one that is well suited for your needs.

· You don’t have to worry about taking care of any major maintenance issues because you can take out a package that will cover this for you.

· Many leasing options will allow you to buy the van at the end of the lease.

· You get to choose how long you want to lease the van. The average time ranges between two to three years but you can choose to lease for a shorter period of time or a longer one if you prefer. (more…)

Leasing is a valuable alternative for growing businesses. Equipment leasing gives us:

1. Maintain Capital Strength
2. Efficiency
3. Flexibility
4. Obsolescence Protection
5. 100% Financing
6. Customized solutions
7. Asset Management
8. Tax Advantages

When you are leasing equipment for your business such as computers, heavy construction equipment, used medical equipment or and farm equipments, you may qualify for benefits that you may not have known existed.

About The Equipment Lease Calculator

As a business lessee, you probably want to know approximately what you can expect to pay for an equipment lease. Here’s an equipment lease calculator that will give you fast answers to your financial questions. Simply enter the cost of the equipment that you are looking to finance and analyze quotes for 12, 24, 36, 48, or 60 months. Determine if a lease fits your priorities, long term goals and financial condition, all with a few clicks of your mouse. It’s easier than ever to determine the amount and length of lease that’s right for you. (more…)

Don’t you hate how the economy has prevented you from buying the home you’ve been dying to buy? Don’t you wish there was some way you could get your new home without all those documents and qualifications? Well, then I’ve got good news for you. The lease purchase method will allow you to get your new home easily.

While you may find the concept intimidating at first glance, lease purchase or ‘lease with option to purchase’ is actually a pretty straightforward concept that is easy to understand. What happens is that lease a house from its current landowner. Of course, there will be an end to this leasing period, whether it is a year or two after you move in. (more…)

Are you having difficulty buying your dream home because you don’t qualify for any of the available loan programs? But do you have a stable job which provides you with enough income to actually buy a home? If so, then you should take advantage of the lease purchase program.

This program is a simple yet beneficial one for both the landlord and the tenant. What happens is that the buyer pays a small down payment for the home and he can automatically move into it. Then each month he pays a small amount of money as if he were renting the place. Once the full price of the house has been paid then full ownership of the home is transferred to the tenant.

The advantages of engaging in this method of buying a new home are great. Firstly, you will only need to pay a small down payment. Likewise, you can move into your home right away. Also, you don’t need to go through the trouble of filling up stacks of forms, each of which has a chance of being rejected.

Here, you only have to fill up a single form in which you promise to pay for the entire selling price of the home. Then, you’re good to go. Keep in mind that by signing this contract, you are legally bound to buy the home. That means that you just can’t change your mind in the middle of paying the monthly dues. (more…)

Do you want to buy a new home, but cannot pay the entire price for the house you want all in one sitting? Are you a hundred percent sure that this is the house you want to live in for a long time? When use make use of a lease purchase or lease option agreement, you will be able to pay for your house using monthly installments.

More often than not, people interchange the two words. But there is actually a significant difference between the two agreements. When you undergo a lease purchase agreement with you the homeowner of the house you are buying, then you are obliged to buy the house after the leasing period. (more…)

Have you been thinking of buying a house but don’t have enough money yet? If you have been eying an house long enough and are sure that you want to buy it, you can consider having a lease purchase to secure your ownership of the house while still producing the amount of money for the payment. Before you decide on a lease purchase, be sure to seek the help of a real estate lawyer to help you with the legalities, and always remember these basics.

First, you and the landlord have to decide on a specific duration of time for you to pay the lease purchase. Within this period, you are required to pay the monthly fee, a percentage of which goes to the down payment and the rest goes to the landlord. You have to absolutely meet the deadline for paying off the full amount of the house to have the right of ownership. Failure to do so means that your right of ownership can be forfeited and you can even be sued.

During the negotiation process between the buyer and the seller, the two can decide on a purchase price which is slightly higher than the market value. The important thing is that both parties agree on the price and the duration of time the buyer should pay it off. Typically, the common length of payment period ranges from a year to three years, at the end of which the buyer should have already applied for bank financing and had been able to pay the seller in full. (more…)