“Prescribing” the Right

Financing for Your BusinessUsing Leasing to Acquire

Equipment, Technology and Software

Equipment Leasing Facts/Trends

History of Leasing Thousands of years old: Ancient Samarian city of Ur

• Agricultural tool rentals to farmers by priests Utilized By the Automotive industry In the 1950’s Needed a way to move more cars with increased

production capacity Used a small monthly payment to make a large ticket

item more cost efficient to the general public

$300 Billion industry and growing80% of companies lease equipment

Paying monthly for the use of equipment, technology or software that generates revenue, or, improves

workflow efficiencies and bottom line.

What To Lease, You Ask?!

Benefits of Leasing

Conserve Cash & Working Capital Preserve Bank Lines of Credit Pay Only for What You Use Enjoy 100% Financing Tax Advantages Avoid Bank Restrictions Eliminate Equipment

Obsolescence Flexibility

Lease Types

Capital Lease Title transfers to lessee at end of term $1 Buy Out

• Get it in writing! P.U.T. (10%) Section 179 tax deduction

True/Operating Lease Fair Market Value Asset is off balance sheet Monthly operating expense written off

Flexible Lease Options

Deferred Payments 3 months @ $20/month contact payment

Step Payments Months 1-3: $150 Months 4-6: $350 Months 7-36: Full lease payment

Seasonal Payments Monthly payment skip or reduction

Case-in-PointSubject: Pharmacy Financing

Todd: I know this is a strange question, after the fact, but do you think the leasing company would restructure Frameworks and lease it to us. I am looking at different ways to affect our cash flow. Monthly lease payments may have been a better bet, but now after we have paid for everything, how much would they have been covered in the lease? Would they have financed any of the training, expenses and startup costs, as well as the licensing of the software. Who would I talk to?

‘Rule of Thumb’ Need capital for less than 12 months

Take advantage of bank relationship• Line of credit

Long-term use of a fixed asset LEASE!

Tax Benefits of Leasing: Special Depreciation Rule*

Section 179 tax code allows for 100% depreciation of capital in 1st year up to $250,000 in 2009.

Section 179 Deduction: $250,00050% Bonus Depreciation(2009): $50,000Regular First Year Depreciation Deduction: $10,000Total First Year Deduction:

$310,000Cash Savings on Equipment** $108,500

*Clients should consult their tax advisor to determine benefit availability**Assuming 35% tax bracket

Example: $350,000 Medication Packaging Unit

Acquiring Credit

Personal Credit Scoring Timely Payments Access to Cash

• % availability of revolving credit Number of Inquiries

Business Scoring Time in Business

• Start-up vs. seasoned business Business Type

• S-corp, C-corp, LLC Industry D&B Reporting

• Paydex: Industry Peer Measure• Paynet: Financial debt, i.e., loans, leases, credit lines

Type of Leased Asset

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