Software
Rental
Leasing
Software is a SMART ALTERNATIVE TO CASH!!!
According to industry
research, approximately $2,169,999,458 of software is leased
each year by businesses in the United States. These businesses
lease software because they know that leasing offers numerous
advantages over other type of financing, including tax
deductions, balance sheet management, immediate write-offs, great
flexibility, customized solutions, better asset management, improved
cash flow, flexible end of term options, easy upgrades, and fast
processing.
TEAM Equipment Leasing, Inc. has innovated
a truly unique lease document that will enable your customers
to save real tax dollars. It's called a "Rental Agreement".
Rule: in order
for a lease payment to be tax deductible, the customer cannot
have a "bargain purchase option" such as a $1.00 buy
out. If they have a 10% Purchase Option or NO stated purchase
option, then it may be an operating expense and 100% tax-deductible.
Problem: Leasing
companies assume that there is no residual value in certain assets
such as Software and Signage; therefore common sense dictates
that we write leases with a $1.00 buy out on these kinds of assets.
Solution: Quote
the customer a low lease payment using the $1.00 buy out pricing.
TEAM will write the lease using our new "Rental Agreement".
The Rental Agreement will have no Purchase Option stated. By doing
so, your customer can expense their lease payment as an "operating
expense". When the lease term is over, TEAM will not pursue
the customer for any further "rental payments".
Cash Sale
1. Selling Price =
$10,000
2. Customers tax bracket = 33%
If company was paying cash, the company must earn $14,925 in order
to acquire a $10,000 asset. AND this is NOT even taking into consideration
the internal cost of funds or opportunity cost of tying up the
capital in their equipment purchase.
Lease Sale
TEAM's innovative Tax
Lease allows the customer to expense 100% of each monthly payment.
This benefit means real tax savings to your customers.
1. Selling Price $10,000
2. 36 Month Payment = $362 (w/ no purchase option)
3. Tax Savings = $362 x 33% = $119.46
4. Net payment = $362 - $119.46 = $242.54
5. Net cost of equipment = $242.54 x 36 months = $8731.44 for
a $10,000 asset.
