Equipment Lease vs Bank Loan



Application Process
A lease application can be as little as one page for as much as $150,000 worth of equipment. Approval can occur within 24 hours. Lenders tend to require multiple financial documents before reviewing loan applications for approval, such as tax returns and financial statements. This process can take several days
Costs Covered
Leasing covers the entire cost, including the equipment, tax, shipping and handling, installation fees or any other expense associated with the equipment. Loans usually finance a portion of the equipment cost, neglecting excess costs in acquiring the equipment such as equipment tax, shipping and handling and any installation fees.
Types of Equipment
A lease will generally approve any type of equipment needed, regardless of its condition or whether it is new or used. Lenders may be skeptical about financing equipment they are unfamiliar with, or equipment with low collateral or potential diminishing value.
Down Payments
There is no down payment. The first payment usually entails the first and last months’ payments A down payment is required, separate from the amount covered in the loan. The first payment usually entails a down payment and the first month’s payment.
Interest Rates
The interest rate is fixed. Each payment is inflexible, being determined at the beginning of the lease. This simplifies budgeting, since lease payments are not susceptible to change. The interest rate fluctuates. Payments may grow more or less expensive as the market changes, making it difficult to determine how much capital to dedicate to loan payments for a given fiscal year.
Collateral Requirements
Leasing requires no collateral assets aside from the equipment being leased. A lessor is only legally concerned with that aspect of the business being financed. Banks often claim other equipment or real estate of the company as collateral to secure the loan. This can prove costly if the borrower defaults on a loan, as more than just the financed equipment is at stake.Equip


R&R Commercial Lending
1230 Park Pointe Lane
Winter Park, FL 32789
Phone: 407-740-5166 • Fax: (321) 233-9936