Financing Business Equipment ?
Business owners who acquire equipment including machinery, computers, and other tangible goods, usually prefer a substantial deduction in a single tax year, rather than a little at a time over a number of years. This accelerated deduction is known by its section in the tax code: a Section 179 deduction. The 2008 law increases the amount of qualified property that a business can expense under Section 179 to $250,000.This incentive is for equipment placed in service between December 31, 2007 and January 1, 2009 and is designed for small companies, so the deduction phases out when a business purchases more than $800,000 in one year. (Companies cannot write off more than their taxable income).
The law passed in 2008 also created a bonus depreciation of 50% for qualifying assets. This bonus is in addition to regular first-year depreciation.
Benefits of a Non-Tax/Capital Lease
The benefit of a Non-Tax/Capital Lease is that it can take advantage of Section 179: expense up to $250,000 if the equipment is put in use in 2008. In addition, you may depreciate any excess on the depreciation schedule for that asset. Examples of Non-Tax/Capital Leases include a $1.00 Buyout, an Equipment Finance Agreement (EFA), and a 10% Purchase Upon Termination (PUT) Lease. Example Calculation: Assume you finance $50,000 worth of business equipment, put it in use in 2008, and take advantage of Section 179. Your tax savings could be significant: The sample calculation shows how taking advantage of Section 179 can significantly lower the true cost of equipment ownership from $50,000 to $32,500.
For the specific impact to your company, please contact your tax advisor.
Equipment Cost Example
$50,000 truck purchase
$50,000 1st year tax deduction
$17,500 Tax saving this year assumes 35% tax rate
$32,500 1st year net cost for new equipment
Special Finance Programs Include:
$99 per month for 6 months – use the equipment, make money with it, grow your business and then make 54 payments for the balance of the 60 month period.
$0 down payment – no cash outlay for qualified buyers
Seasonal payment skip – take 3 or 4 months off from making payments each year – perfect for seasonal business operations
Finance rates as low ast 6.99% for A+ credit
Step payments – structure your payments lower for the first year or two, then graduate the payment for the remaining term. Perfect for growing companies who could expand with SLT.
We have special finance programs for A, B and C credit ratings. We have special programs for start-up companies as well. Call 866-923-0027 or apply by printing the application and fax to 478-822-9707