American Leasing, Inc.
Lease Programs
ABOUT AMERICAN LEASING, INC. In 1983 leasing became the largest single source of funds used in the acquisition of capital equipment in the United States. American Leasing, Inc. was created at that time to serve this growing industry. Locally owned and operated with an experienced team of leasing professionals, American Leasing, Inc. serves not only Colorado industries but has expanded nationally to provide its customer and vendor base with the finest in creative lease/finance programs. WHAT IS A LEASE? A lease is simply an agreement by a customer to pay a monthly rent for a specific amount of time for the right to use equipment during the term of the lease. The customer does not own the equipment during the term of the lease, but is usually responsible for insurance, maintenance and all other costs of ownership. At the end of the lease, the customer (lessee) has the option to buy, re-lease or return the equipment to the lessor. THE LEASING INDUSTRY The leasing industry has grown to be a $100 billion a year business. 40% of it will come from categories familiar to all businesses:
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Computers/computer peripherals Telecommunications & Office Equipment Production Equipment Medical/Dental Scientific Instruments Construction Equipment
WHO LEASES? 80% of all businesses, and 70% of Fortune 1000 companies lease some of the equipment they use. Our history has shown that the key to a successful leasing, financing and sales support program is our ability to work together combining our energies and resources for our mutual benefit. Introduce yourself to the best today!
WHY LEASE?
PRESERVE EXISTING CREDIT Equipment leasing leaves your existing credit lines untapped and readily available, maintaining your access to funds for short term needs like Accounts Receivable, Trade Discounts, Inventory Peaks, etc. ADDITIONAL LINES OF CREDIT Credit lines with banks are reduced when funds are borrowed for the acquisition of equipment. Leasing keeps those lines intact, and establishes an additional credit line with a lessor. USE OF EQUIPMENT VS. OWNERSHIP Today most active businesses agree that the next best thing to using someone else's money is using their property. Why own something that might not serve future needs and why take the risks associated with ownership? TECHNOLOGICAL OBSOLESCENCE A company that chooses to lease can enjoy the use of equipment without assuming the risks of either functional or technological obsolescence. Ask about our upgrade program. FIXED RATE FINANCING/FIXED MONTHLY PAYMENTS Whatever happens to market rates, monthly payments stay fixed for the term of the lease. No need to worry about floating rates in times of upward money costs. No compensating balances. OVERCOME BUDGET RESTRICTIONS Minimum cash outlay plus modest payments enable you to fit the lease into super tight budgets. Even under severely limited spending schedules, leasing makes it possible to obtain the equipment you need, when you need it. ALTERNATIVE MINIMUM TAX (AMT) The Tax Reform Act of 1986 introduced a modified AMT. The new provision requires a business to calculate both its Regular Tax and its Alternative Minimum Tax. Items such as depreciation, which reduce taxable income for the computation of regular tax, are considered preference items for the calculation of AMT. Be-cause depreciation is a preference item, many businesses find leasing an intelligent tax planning and equipment acquisition tool.
LEASE STRUCTURES
TRUE LEASE Obsolescence risk and Tax benefits make this the most popular commercial lease. The "True Lease" allows the Lessee to expense lease payments, thereby reducing tax liability. Larger companies will always use the "True Lease" when trying to acquire the use of equipment under "operating budget" or when trying to limit "alternative minimum tax" liability. Smaller firms will use the "True Lease" when trying to control tax liability. Generally Accepted Accounting Principals (GAAP) and Internal Revenue Service Code require "Fair Market Value" purchase options on the "True Lease". It's also usually accounted for "off balance sheet" in the financial statements. If the Lessee options to purchase the equipment at the end of a lease, he may then capitalize the purchase and take further deductions. CAPITAL LEASE Often referred to as "Conditional Sales Contract". Although not as popular as the "True Lease", the Capital Lease is used where the Lessee has "pride of ownership" or wants all costs known up front. Capital leases are accounted for much the same as loans. The lessee usually capitalizes the lease and assets, then deducts only the "implicit interest" portion of the payment and depreciation. This lease usually has a $1.00 Purchase Option or fixed purchase option know as a "Put". The capital lease is usually "on the balance sheet", and usually does not allow as favorable financial statement presentation needed for other bank borrowings. CUSTOM QUOTES Available for Municipalities and other governmental entities. Potential Lessees are advised to contact their CPA for detailed information on accounting and tax guidance if they have any question. Financial Statement conditions have considerable effect on GAAP and IRS requirements.
LEASE CREDIT CRITERIA  $15,000 or LESS  TWO YEARS IN BUSINESS (Under the same ownership)  CLEAN TRADE REFERENCE  BANK AUTHORIZED TO RATE (Low four figures average balance with at least two-year satisfactory history.)  CLEAN PERSONAL CREDIT HISTORY   LESS than $75,000  THREE YEARS IN BUSINESS  AND ALL OF THE ABOVE REQUIRMENTS!!!   $75,000 or MORE  COMPLETE FINANCIAL PACKAGE Including:  Two Year End Financial Statements  Current Interim Financial Statement  Two years Tax Returns  Other Information As Requested Lease Programs