We Make It Simple

Here Are Some Of The Ways We Make Equipment Financing Easy…

Paperwork, Schmaperwork – App Only up to $250K!

Kingswood now has application only funding limits up to $250,000. That means less time and paperwork needed to get you the financing you want to make that next big equipment purchase. And typically these credit decisions are made within 2-4 business hours.

Minimum Ownership Requirements – Corp Only Options

Kingswood has options to secure businesses with established credit without a personal guarantor, an option called Corp Only. And for businesses without the established credit, Kingswood has options to secure financing with a minimum of 1% ownership. Either way, that means less time getting every owner’s signature to apply or to sign for financial documents.

Electronic Documents

When it comes to closing the deal for your equipment, almost no one wants to wait for paper documents in the mail any more. With eDocs financial documents can be sent instantly to your email address for signing.

 

No Payments for 90 Days

Give Your Customers The Power To Do More

Qualified buyers can buy the equipment they want now, and make no monthly payments for 90 days.

“Buy Now & Pay Later”

Program Highlights

  • The first payment will be due 90 days from the date of funding. For example, if a deal funds on December 15, the first payment will be due March 15th.
  • Certain restrictions apply, including, but not limited to: Startup restaurants, startup salons, ATM equipment, security monitoring agreements are not eligible.
  • Commercial customers only. Qualified businesses must have at least 2 years time in business to qualify.

Program Benefits

The benefits for your customers are obvious. They can get the equipment they want now and use that equipment to earn money for 90 days before the first monthly payment is due. Tell your customers to keep their hard earned cash and let the new equipment earn they money to pay for itself!

This program is also very popular with equipment suppliers who can leverage this limited-time offer to help earn more business. Tell any customer that shows interest in the option that there is no cost or obligation to get approved.

How can I get my clients Approved for No Payments for 90 Days?

You and your customers can apply like normal. We simply need to know that your customer is interested in this option. If there is mention of No Payments for 90 Days on an application we will immediately begin qualifying for this program.

Don’t wait until it’s too late – Tell all your customers about this option and share our secure application to find out if they qualify. It’s that simple!

2017 Business Tax Deduction Ends Soon

2017 Section 179 Qualification Ends December 31st

What Is Section 179?

Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income. It’s an incentive created by the U.S. government to encourage businesses to buy equipment and invest in themselves. Section 179 is one of the few incentives included in any of the recent Stimulus Bills that actually helps small businesses. Although large businesses benefit from Section 179, the original target of this legislation was much needed tax relief for small businesses – and millions of small businesses are actually taking action and getting real benefits.

How Does Section 179 Work?

When your business buys certain items of equipment, it typically gets to write them off a little at a time through depreciation. In other words, if your company spends $50,000 on a machine, it gets to write off (say) $10,000 a year for five years (these numbers are only meant to give you an example). Now, while it’s true that this is better than no write off at all, most business owners would really prefer to write off the entire equipment purchase price for the year they buy it. In fact, if a business could write off the entire amount, they might add more equipment this year instead of waiting over the next few years. That’s the whole purpose behind Section 179 – to motivate the American economy (and your business) to move in a positive direction. For most small businesses the entire cost can be written-off on their tax return.

Limits of Section 179

Section 179 does come with limits – there are caps to the total amount written off, and limits to the total amount of the equipment purchased. See our “IMPORTANT NOTICE: Section 179 Expanded” post for details on limits for a given tax year.

How Can I See How Much Money I Can Save My Customers?

Included on our Finance Calculators is a “Section 179 Tax Savings” feature to show you or your customers how much they could save with this benefit. Simply put an amount in the calculator, and hit the “Section 179 Tax Savings” button to see Potential Tax Savings. By default, a 35% tax bracket is assumed for calculation purposes.

Show A Discount Every Time Without Ever Reducing The Price!

The Tax Savings Estimate is a great way to show a discount on a product without ever having to reduce the purchase price. Download this flyer to show your customers an example of how Section 179 works and how much they can potentially save on your equipment purchase (click the image to download):

 

We also suggest printing out a personalized Tax Savings Estimate along with every quote to show the total Bottom Line Equipment Cost After Tax Savings. For your convenience, our finance calculators automatically provides this estimate along with every quote. If you have any questions about how to provide this estimate along with a finance quote, please contact us for assistance.

Loan or Lease?

Bank Loan or Equipment Loan or Equipment Lease?

Business owners have options when it comes to commercial equipment financing. The most common are bank loans, equipment loans, and equipment leases. This post will address the advantages and disadvantages of each.

What’s the difference?

Bank Loan

If you have a good credit history you can qualify for a bank loan. Depending on available terms at your bank, these loans can have the lowest payout. If you are buying new equipment and your dealer or bank qualifies you for promotional-rate financing, such as 0%-5%, take that money and run. No one can offer you better terms.

Advantages:

  • Typically the lowest payout over the life of the loan

Disadvantages:

  • Small credit window – 85% of applicants are declined
  • Typically require significant down payment
  • Normally require significant amounts of tedious documentation and income verification
  • Sales tax may be due upfront
  • May tie up available lines of credit
  • Process usually takes several weeks

Equipment Loan

Equipment loans can come in many different names; Equipment Finance Agreement (EFA), Capital Lease, Finance Lease, $1.00 Buyout… all are considered equipment loans by the IRS. The IRS does not classify these leases as “True Leases” because even though they incorporate the lease mechanism for the loan, the buyout is not significant enough to be considered a true lease. More recently equipment loans have been very popular because of Section 179. For example, depending on the tax year, businesses could immediately deduct the full cost of equipment, up to $500,000, against their taxes. They are also popular because these loans are easier to qualify for than bank loans, have less paperwork, and typically take much less time to fund.

Advantages:

  • Equipment Loans are Lease-To-Own – You own the equipment after completing agreed upon payment schedule
  • Easier to qualify for and less paperwork than a bank loan
  • Low to no down payment required
  • Similar finance terms as bank loans up to 5 years
  • Fast funding, in as little as 24 hours after signed documents are received
  • Immediate tax deduction available for cost of equipment

Disadvantages:

  • Payments are not fully tax deductible
  • Payments can be higher than a lease with a residual buyout
  • No option not to buyout equipment

Equipment Lease

The IRS classifies equipment leases as True Leases, which are the same type of transaction as leasing a car. With a True Lease there is a significant buyout, typically 10% – meaning if you lease a $25,000 piece of equipment, the buyout option would be $2,500. Equipment leases are popular because usually 100% of the payments are tax deductible. They also typically offer the lowest monthly payment option because you’re often only financing 90% or less of the equipment. This type of transaction does include a choice at the end of the lease term to either buyout the equipment, return the equipment, or continue renting the equipment.

Advantages:

  • Typically the lowest monthly payment option
  • Payments are usually 100% tax deductible
  • Easier to qualify for and less paperwork than a bank loan
  • Low to no down payment required
  • Similar finance terms as a bank loan up to 5 years
  • Fast funding, in as little as 24 hours after signed documents are received
  • Includes buyout options

Disadvantages:

  • In order to own the equipment the buyer has to pay to the residual amount not financed in the lease agreement

So which one is best and when?

Why Equipment Leasing Is Usually Better Than An Equipment Loan, But Not Always

This is why we have a job. We talk to customers every day looking to finance their next business equipment purchase, and every one has their own situation and experiences. With that being said, in many cases using an Equipment Lease to purchase equipment can have the greatest bottom line savings.

Let’s say you want to buy some equipment for $40,000 and finance it over the next 4 years…

Equipment Cost:    $40,000

Loan/Lease Term:    48 Months

Quoted Lease Payment:    $1,194

Quoted Loan Payment:    $1,261

Lease Residual:    10%

Your Tax Rate:    30%

                               Lease          Loan

Total Payments:   $57,312     $60,528

      Tax Writeoff:   $17,194      $12,000

After-Tax Payments:  $40,118     $48,528

     Residual:  $4,000      $1

Net Ownership Cost:    $44,118     $48,529

Total Lease Savings:   $4,411

This example shows how a borrower can save $4,411 simply by choosing an Equipment Lease over an Equipment Loan for the exact same piece of equipment. Buyers travel hundreds of miles to buy equipment for less when they can save thousands just by choosing to finance with a True Equipment Lease as opposed to a Bank or Equipment Loan.

Is A True Equipment Lease Always The Best Choice?

There is no one solution that is always the best in the world of business finance. That is why we here at Kingswood are ready to find the best solution for your specific situation.

If, for example, you are having an exceptional year and have abnormally high income, a faster depreciation may make a lot of sense. Our finance calculator automatically provides you with a free estimate on total bottom line equipment cost after a Section 179 deduction, so that you can see the potential savings before committing to any purchase. As always, check with your accountant before making any decisions. We are a finance company and are aware of these tax benefits, but only your accountant can tell you if this is the best tax application for your business.