Leasing and Bank Financing Programs
Our commercial equipment leasing programs and equipment financing programs are designed to meet the cash flow of our customers. Since all equipment buyers do not have the same revenue trends and allocated expenditures for equipment, Sumex Capital meets different customer needs by offering flexible lease payment programs and terms. Standard lease terms are 12 to 60 months however longer terms may be available for specific equipment types. Deferred payment programs may be considered for customers seeking to produce revenues before paying for the equipment. Seasonal and skip payment programs can be considered for businesses that have low revenue trends during certain times of the year. Quarterly and annual payment plans for government and municipal customers can also be provided.
Adding or updating equipment anytime during the lease is easy with an additional coterminous lease program, which will terminate at the same time as your current lease.
Here are just a few of the leasing programs and financing options available through Sumex Capital:
- Excellent ratesfor established businesses with good credit history.
- Start-up businessesare considered.
- Prefunding may be available.
- Application only programsup to, and sometimes exceeding, 50k.
- We can leasevirtually any type of equipment in almost any industry.
- New and Used equipment at the same, low rates.
- Roll in software, shipping, installation, warranties, taxes, freight as well.
- Credit turnaround directly from the customer averages 24 hours or less. However, approved Vendor turnaround can be much quicker.
- Volume vendor bonuses are available as are return lessee discounts. Please call.
- Service after the sale. We will assist our lessees with any needs after closing.
- We specialize in multi-vendor and multi-funder transactions.
- Transactions accepted from $1,000-$20,000,000.
- Master leases or lease lines of creditmay be available for qualifying businesses.
- All leasetypes are available including, financial ($1 out), Operating or True leases (FMV residual), Special ($101 out), and Standard Leases (10% out).
- Our Leasesare typically “Lease-to-Own”.
- We do titled and non-titled equipment.
- Municipal leasesare available with the best rates
We offer special programs for National and Major Accounts. Please call to go over your specific needs and our customized programs.
Rates will vary due to the dollar size of the transaction, equipment type, time in business, credit, etc. Please contact us for a current customized quote.
We encourage equipment vendors to contact Sumex Capital representative with any lease process questions they have along with the name and telephone number of the leasing customer so we can speak with them directly. After completing the lease application, the lease process will flow as outlined below:
- Fax, e-mail, call in, or submit your application
- Upon receipt, the applicationwill be forwarded to the credit desk for review.
- The averageresponse for approvals is 24 hours from the time that the receipt of all necessary information has been verified. Some applications are approved in as little as 4 hours and many can be approved on the same day that they were submitted. Sumex Capital will typically notify the vendor (seller) and the lessee (buyer) with the credit
- Upon receiving an approval, the vendorwill issue an invoice or pro-forma invoice allowing the funding documents to be prepared. Depending on the complexity of the lease or the covenants, documents can take as little as 4 hours or as long as 48 hours to prepare.
- Documentswill be e-mailed, faxed, couriered or hand delivered to the lessee for signing.
- The lesseewill courier the original signed documents
- Upon the review of the completeddocumentation package, a Purchase Order (PO) will be issued to the vendor. The PO verifies that a deal has been finalized and places the order with the Vendor. Forms of prefunding may be available, and if required, the transaction will prefund at this time.
- The equipmentis installed.
- Upon the completion of the installation, the leasingcompany will contact the lessee for the verbal to verify they are satisfied and happy with the equipment. If a site inspection is required, it will be ordered at this time and final funding will occur after the equipment has be delivered to the satisfaction of the lessee.
- Upon receiptof the satisfactory verbal and site, if required, a check will be couriered or wired to the vendor.
Master leases, Master Finance Agreements, creative financing, or lease credit lines, major accounts can access the best leasing programs available! If you are looking for a funding source that can create custom programs for your companies purchases, call Sumex Capital right away! We offer businesses low rates, customized programs and the best service anywhere. If you want a leasing company that can do it all, and with one phone call, ask us to set your company up as a major account.
We welcome major accounts at Sumex Capital. A Major Account status can be assigned to customers that have a lease with us and wish to continue increasing their leasing volume. Custom leasing programs can be created that will make it simple and quick to obtain leasing for most equipment purchases on an ongoing basis. If your credit application and credit information are already on file, all we usually require is updated financial information, as required, for various exposure points. Master leases are available and commercial equipment leasing, or equipment financing, programs are available for all equipment types! If you are interested in setting your company up as a Major account with us, please feel free to call us at the number below and we will promptly respond to your request.
- Use of Equipment. Equipmentleasing enables you to pay as you use an asset.
- Fixed Payments. Monthlypayments on an equipment lease are generally fixed for the entire term of the lease. This is a distinct advantage in times when many equipment-financing transactions have floating interest rates. Knowing in advance what your payments will be enables you to budget & manage equipment cash flow.
- No Down Payment. Most traditional equipmentfinancing options require a sizable down payment. On cash purchases this can be as much as 25%. No down payment is required on an equipment lease.
- 100% Equipment Financing with Low Rates. Traditional methods of equipmentfinancing usually do not include “soft cost” items such as software, installation and freight. A good equipment lease transaction allows these items, thereby allowing you to finance the total package.
- Flexibility. Equipmentleasing provides the lessee with greater structuring flexibility including payment variations, end of term options, etc.
- Easier Than Bank Loans. Equipment leasing programs and procedures are specially designed to reduce the work and speed up the process of financing capital equipment for business.
- Purchase or Renewal Options. Most equipmentlease arrangements allow customers the option to either purchase at a stated amount or at a Fair Market Value, or to renew the lease at a reduced monthly payment.
- Conservation of Capital. Because of the sizeablecash outlay involved in purchasing new equipment, many businesses choose to lease to conserve capital. Cash available can then be used to buy inventory, advertise, and hire personnel. Any business that has important alternative uses for cash will always find that leasing wins out in the lease versus buy
- Easier Cash Flow Forecasting. Because paymentsare fixed, users can intelligently budget into the future.
- Ability To Work Within Budget. Subsidiaries of large corporations or department managersof small companies have the authority to acquire equipment they need, but only if it fits within operating budget Leasing allows them to have the use of equipment (which is all they really want) and still work within operating budget limits and avoid capital expenditure committees for approval.
- Tax Benefits.Lessees can usually deduct their monthly lease payment as an operating This clearly reduces the new cost of the lease. Please consult your tax accountant.
- State Of The Art Equipment. When dollarsare already budgeted, managers who need newer equipment can conveniently acquire that equipment on a dollar-per-month basis since the monthly payment precedent has usually been established.
- Additional Financing. When equipmentis bought with borrowed funds, credit lines with a lender are reduced. When equipment is leased, a business has in fact established additional financing through its Lessor and in many cases preserved the bank financing amounts that were otherwise available to the company.
- Use Lessor for Other Equipment Needs. Many Lessors are in the position to leasejust about any type of equipment.
- Equipment Leasing. Your new machinery and equipmentwill allow you to preserve your existing cash flow and to be able to respond to new business The profits generated from the productivity of the equipment are usually greater than the lease payment.
- Equipment Types.Below are just a few equipment-leasing options with Sumex Capital: Computers, industrial equipment, machining equipment, fitness equipment, software, used equipment, office equipment, office furniture, communications equipment, construction equipment, medical equipment, rental equipment, and much more!
The tax benefits and tax advantages of equipment leasing can be extremely important to a business’ cash flow. By carefully structuring your lease purchase with your accountant, certain types of lease buyouts, such as true FMV, may create tax advantages for your company if they qualify as true operating leases (true leases).
In addition to the advantages of conserving valuable company working capital and preserving existing bank credit lines, leasing business equipment rather than paying cash may offer tax benefits and savings if structured correctly. Operating or “true” lease payments may be fully expensed and accelerate tax deductions when compared to lengthy depreciation schedules. Conventional bank and other financing often have term restrictions and relatively higher down payment requirements than leasing. Furthermore, virtually all bank loans must be capitalized and cannot be depreciated. Sumex Capital offers 100% financing including soft costs, warranties, tax, freight and installation.
It is important to check with your accountant about any potential tax benefits or tax advantages for proper advise. Sumex Capital does not offer tax advise to any of our clients.
Lease vs. Loan and Bank vs. Lease
When comparing lease vs loan, or bank vs lease, for the lowest rates, it is important to understand key terminology and points. Equipment leasing companies and lease funding sources may be the best overall choice for purchasing your equipment.
Banks prefer to loan long-term money on a floating or variable rate tied to prime, or some other indices. This places the rate risk on you instead of the bank. Lease rates are fixed for the term of the lease.
Soft costs are such things as sales tax, shipping, installation, training, software, etc. Your friendly banker is more likely not going to finance these integral parts of your equipment financing needs. Leasing is 100% financing and can cover all soft costs.
Banks typically require 10 to 25% down on any equipment financing. Once again, they are more concerned about their exposure and risk and less concerned about your practical business needs (e.g. retention of working capital). Leasing is 100% financing and most traditional leases or finance agreements require as little as 1 or 2 payments up front.
Most banks will require that you maintain certain minimum balances if you want their lowest rates. Think about this one for a second; if you maintain certain balances that they pay you no, or low, interest on, this inflates their actual yield well above your loan interest rate. Additionally, this ties up your working capital. Leasing has no such requirement.
Most bank loans contain all sorts of restrictions and covenants, such as maintenance of certain financial ratios, restrictions on future debt and salary restrictions. Additionally, look for “Call” provisions which banks incorporate that give them the right to demand and early payoff of your loan for reasons you have no control over. Leasing has none of these types of provisions.
Banks prefer to classify a loan as a “Revolving” loan. This gives them the ability to extend or cancel the loan on a yearly basis. This means annual submission of Financial Statements for review and approval. Additionally, this loan is now a current liability, which really messes up your financial ratios. Leasing is fixed term financing.
Blanket Lien on Business:
Banks take a security interest in all of your company’s assets (presently owned and acquired in the future) by publicly filing a UCC. This ties up all of your assets, including inventory and receivables. Leasing companies typically file a UCC only the the leased equipment.
Banks always want a full financial package to help them make their own credit decision on your loan. Leasing usually only requires a one page application that can approve a lessee up to a $100,000.
Banks establish a maximum borrowing limit for the company, and generally the principals also. This restricts future borrowing. Leasing offers a multitude of alternative lending options in addition to your company’s bank lending options.
Credit Review Process:
The bank credit review process is long and tedious and generally request further information. Leasing usually takes 24 hours or less for an approval.
Tax Write Off:
Since bank financing makes you the owner of the equipment, your only tax advantage is depreciation and the loans interest. Lease Payments may be 100% deductible or may be a form of accelerated depreciation depending upon the lease type and your company’s financial structure. We also have competitive products to bank loans such as finance agreements where you own the equipment from inception and no purchase option letters apply.
Our approved equipment list is very broad. However there are certain types of industries and equipment that are generally much more difficult for us to finance. We reserve the right to reject other types of equipment or industries on a case-by-case basis.
General Equipment Restrictions
Automatic Telephone Dialers
Boats & Marine
Credit Card Authorizers
Vending (under 2 years time in business)
Others may be restricted as well
General Industry Restrictions
Restaurants under 2 years old under current ownership.
Some home based businesses under 2 years old under current ownership
Other industries may be restricted on a case-by-case basis.
Please feel free to contact us with any questions on equipment or industry considerations.
In some cases, financial statements are required or requested. To obtain leasing services for transactions that exceed our “Application Only” requirements, or otherwise may require additional information to obtain a credit decision, or to get the lowest rates, the following information may be required.
Transactions up to $150,000
- Principalslast 2 years personal tax returns (unless the company is Publicly, or widely, traded or non-profit). If there is income or expenses on schedules, complete returns will be required.
- Businesstax returns for the last 2 years, or complete audited financial statements with all notes.
- Most current BusinessInterim Financial Statements with P&L, Income Statement, Balance Sheet.
- Personal Financial Statementfor each principal unless publicly traded or non-profit.
- If the businessis under 2 years old, a business plan, and principal’s resumes may be required.
- Equipment description and associated costs
- Last 4 months of your businessbank statements (first page only of each month)
Transactions over $150,000
- Complete copies of each Principalslast 2 years personal tax returns (unless the company is Publicly, or widely, traded)
- Complete businesstax returns for the last 2 years, or audited financial statements with all notes.
- Most current BusinessInterim Financial Statement
- PersonalFinancial Statement for each principal unless publicly traded.
- If the businessis under 2 years old, a business plan and principals resumes will be required.
- Equipment description and associated costs
- 2-3 comparable borrowing references.
- Last 4 months of your businessbank statements (first page only)
- Debt schedule may be requiredas will additional information as requested by credit.
We can handle many tough credit customers. Tough credit, past bankruptcy, slow pays, poor credit scores, suits, judgments etc.. In today’s economy, obtaining capital can be very hard. If you feel you are a tougher credit candidate with past bankruptcy, slow pay or low scores, we may still be able to help. Please contact your Sumex Capital representative to discuss your situation and specific needs.
The following credit guidelines provide a broad overview of how credit is generally considered. There is no “industry standard” but these can serve as guidelines. Every credit bureau and business report is completely unique.
- Perfect personal and business credit with many lines of credit
- No Bankruptcies
- Low revolving debt
- Few credit inquiries in last 12 months
- No evidence of suits, liens, collections, or judgments
- No foreclosures or repossessions
- Excellent score in credit desk
- No slow pay activity on personal or business credit
- Business should be established over 2 years with strong D&B or Equifax Report
- Strong financial statements may be requested for lowest rates
- True A +credit can apply for lowest rates available
- Good overall credit with many lines of credit
- No Bankruptcies
- Lower revolving debt, under $25,000 and under 50% credit utilization
- Few credit inquiries in last 12 months
- Evidence of suits, liens, collections, or judgments that are satisfied or under $1,000 aggregate
- No foreclosures or repossessions
- Good score in credit desk
- No recent slow pay activity on personal or business credit
- New businesses and Business over 2 years old with good business credit
- Bankruptcy on credit bureau or business over 5 years old
- Evidence of a few slow pays to creditors
- Open suits, liens or judgments (less than $1,000 aggregate)
- No foreclosures or repossessions
- Revolving debt considered high, or high utilization of available credit
- Explainable, high credit inquiries in last 12 months
- Credit bureau scoring not within credit desk standards
- These credits are considered on a case-by-case basis. Financial statements may be required.
- Unfortunately, we cannot lease to businesses under 2 years old with this credit criteria.
- Bankruptcy less than 5 years old
- History of slow pay to creditors since bankruptcy
- History of suits, liens, judgments or collections
- Foreclosure or repossession
- High revolving debt on credit cards (without acceptable tax returns)
- High credit inquiries in last 12 months
- Structure programs usually required if approvable and financials will be required.
If you have any credit questions, or wish to receive a copy of or your credit bureau or your D&B (Dun & Bradstreet) business report, please contact the following agencies directly for assistance.
LESSOR – The funding source is usually considered the Lessor.
LESSEE – The business and/or principals signing the lease are considered the lessee’s.
FUNDING SOURCE – The company, or bank, that will be paying the vendor.
DOC THE DEAL – This step occurs after we obtain an approval from credit. Here, the rep requests the required leasing documents from the documentation department for the Lessee to sign.
PREFUNDING – Some vendors want to be paid at least a portion of the deal up front, usually 50% of the invoice amount. This is called prefunding. It must be approved by the funding source on a case-to-case basis. Both the vendor and the lessee must be stable for acceptance.
90 DAY DEFERRED PROGRAMS – For strong lessee’s who would like to like to begin their payments after the equipment begins to generate income we can offer 90 day deferred payments. These must be approved in advance by the funding source. Only strong lessee’s over 2 years in business under current ownership will qualify for 90 day deferred plans.
UCC-1 FILING – This is a filing with the state the perfects the security interest of the funder. Most funding sources will want filings to be recorded.
CAPITAL LEASE – Typically, $1.00 out leases are considered capital leases. This type of lease is very similar to a financing agreement, meaning that payments are similar to a bank loan. Usually, capital leases are not 100% tax deductible. The equipment is put on a depreciation schedule and written off over a period of years.
OPERATING LEASE – These leases have a buyout clause at the end of the term. , True operating leases can be 100% tax deductible. This means that all monthly payments can be written off as an expense and the equipment does not need to be depreciated over a term of years.
FINANCE AGREEMENT – With a finance agreement, the customer owns the equipment and the financier places a security interest in the equipment. These agreements are capitalized and depreciated. When the last payment is made the agreement is fully satisfied.
LEASE – Leases are a simple way of obtaining money. Leases, in most cases, will have payments or security deposits due up front, and a buyout at the end of the term. Leases are very simple to set up and have many tax benefits. Leases also require very little money up front and may not require financial statements or tax returns for up to $50,000.
HARD COSTS – Equipment and its tangible peripherals are considered hard cost. Most other expenses are soft costs.
SOFT COSTS – Freight, labor, software, and other intangible items are considered soft costs. Only a certain percentage of the total transaction can be soft costs in many cases. These costs usually cannot be recovered in case of default and therefore increase the riskiness of the deal.