100% Equipment Finance Solutions

Equipment leasing may allow your business to improve your tax position and stay current with the latest innovations without becoming burdened with aging, obsolete equipment and technology.

Maximize Cash Flow
  • Finance 100% of equipment cost and use cash for working capital and business growth, not equipment purchases.
  • Freight, taxes, fees, rigging and set-up charges may be included in the equipment cost and amortized over the lease term.
  • Lower payments through exchanging tax benefits. When Huntington owns the asset, it retains certain tax benefits (i.e., depreciation) and passes those benefits to its clients through lower lease payments.
  • Generate cash through sale/leaseback.
  • Match payments to cash cycle.
Minimize and Leverage Tax Positions
  • Avoid the negative impact of asset purchases
Minimize Alternative Minimum Tax (AMT) impact. Lease payments/rentals are not treated as a tax preference item. Company-owned equipment is depreciated via MACRS faster for tax purposes than for book purposes. A company’s book income is typically greater than its tax income. Generally 50% of the excess book income over tax income is treated as a tax preference item used to calculate AMT. So lease it – no depreciation, no preference item, no AMT problem!

Leverage the 40% rule/Mid-Quarter Depreciation Convention. If more than 40% of a company’s annual equipment acquisitions (via cash purchase or loan financing) occur during its fourth fiscal tax quarter, the company must use the Mid-Quarter Depreciation Convention instead of the preferred Mid-Year Convention. Therefore, companies incurring significant CAPEX in the fourth quarter may find it more prudent and economically beneficial to lease versus own/depreciate.
  • Utilize net operating loss carry-forwards.
  • Exchange tax benefits for lower cost of money.
  • Reduce property taxes by reducing the “basis” in the equipment at the end of the lease term.
  • Write off equipment purchases in the form of rental payments and reduce taxable income faster than allowable accelerated depreciation methods.
Optimize Financial Reporting
  • Improve earnings in the near term. Lease payments are usually less than depreciation and interest expense during the first three years.
  • Comply with primary bank ratios and revenue bond covenants.
  • Improve Return on Assets.
  • Minimize financial restrictions.
Leverage Assets
  • Properly match use to ownership risks.
  • Reduce cash requirements during the useful life of the equipment.
  • Avoid stranded assets.
  • Trade up to avoid obsolescence.

For More Information, Contact

Equipment Finance

(866) 311-2755 Monday to Friday, 8:00 a.m. to 5:00 p.m. ET