WHY LEASE
Twelve reasons businesses lease their equipment.
Buying outright takes cash out of the business on the day you can least spare it, and a bank wants a lien on everything you own before it will lend against a machine. Leasing is the third option, and for most of the businesses we fund it is the cheapest one to live with.
What leasing actually gets you
Twelve of them, in the order most owners weigh them: can I get the equipment, what does it cost me now, what does it cost me later, and who am I signing with.
01
Speed
Minimal documentation and few restrictions, so you can move on an opportunity while it is still in front of you. Applications are approved in hours rather than days.
02
Easier than bank financing
No compensating balances, no cash-flow projections, no large down payment. Banks attach blanket liens, escalator clauses, restrictive covenants and call-anytime provisions to equipment credit. A lease is secured by the equipment itself.
03
No large down payment
A lease finances the cost of the equipment, so the capital you would have handed over at signing stays in the business and goes to work somewhere it earns.
04
Delivery, installation and training included
The soft costs of an equipment purchase are the ones that get overlooked: freight, rigging, installation, training your staff, ongoing support. We write them into the same agreement instead of leaving them as invoices you did not budget for.
05
Cash flow you can forecast
A fixed payment for a fixed term, with no floating fees. You know what the equipment costs every month for the life of the lease, which makes the rest of the year easier to plan.
06
Payments built around your year
Seasonal payment schedules for businesses that do not earn evenly, step-up structures for equipment that takes time to ramp, and a 90-day deferred program that lets the equipment run for three months before the first payment is due.
07
Room to upgrade
Technology moves and the competitive edge moves with it. Terms can be structured to allow upgrades and trade-ups partway through, so a five-year lease does not lock you to five-year-old equipment.
08
Options at the end of the term
Three of them, and they are yours to pick: return the equipment, buy it, or extend the lease. Nothing is decided for you at signing.
09
Someone else carries the ownership risk
You use the equipment for a set term at a set payment. If you hand it back at the end, what happens to it next is the leasing company’s problem — not a disposal job that lands on you.
10
An expense, not a depreciation schedule
Lease payments generally appear as an operating expense on the income statement rather than as an asset written down over years. Many leases qualify as a deductible overhead expense rather than a purchase.
11
Tax benefits passed through
Where the lessor holds the tax benefits of ownership, those benefits can be passed back to you in the form of a lower monthly payment.
12
A track record through the bad years
American Capital Group has arranged equipment lease capital for small businesses since 1995, without interruption, including the stretches when other lenders stepped back.
LEASING VS. THE BANK
We’re not a bank. We’re ACG.
American Capital Group has done one thing since 1995: equipment leasing for small businesses. Banks lend on equipment too, and sometimes a bank is the right answer. But when the asset is a machine rather than a building, the two take very different paths to the same equipment.
With ACG
At a typical bank
One short application
WITH ACG
One page to apply, with no financial statements up to $150,000.
AT A TYPICAL BANK
Cash-flow projections and a full financial package before anyone looks at the deal.
No hit to your credit
WITH ACG
We use a soft credit pull, which won’t affect your credit score.
AT A TYPICAL BANK
A hard inquiry on your credit report, plus years of tax returns.
Answers in hours
WITH ACG
A credit decision usually the same day.
AT A TYPICAL BANK
Weeks of review before you hear back.
Keep your cash
WITH ACG
No large down payment, and soft costs like freight, installation and training go in the same agreement.
AT A TYPICAL BANK
A substantial down payment, plus compensating balances left on deposit.
Your assets stay yours
WITH ACG
The equipment is the collateral. Nothing else is tied up.
AT A TYPICAL BANK
A blanket lien across your business assets, not just the equipment.
Keep your bank lines free
WITH ACG
Lease the equipment and your bank credit stays open for working capital and the unexpected.
AT A TYPICAL BANK
Bank equipment financing uses up borrowing room you may need later.
No surprises later
WITH ACG
A fixed payment for a fixed term, with no floating fees.
AT A TYPICAL BANK
Escalator clauses that can raise what you pay partway through.
Can’t be called mid-term
WITH ACG
Your lease runs its full term. Make your payments and it can’t be called early.
AT A TYPICAL BANK
Call-anytime provisions that can shorten the term on you.
No financial covenants
WITH ACG
No minimum balances or ratio tests. Nothing to trip over while you pay on time.
AT A TYPICAL BANK
Restrictive covenants, such as minimum balances and debt-to-equity tests, that can put you in default even when every payment is on time.
Built around you
WITH ACG
Seasonal, step-up and 90-day deferred structures, any vendor, new or used, and return, buy or extend at the end.
AT A TYPICAL BANK
Fewer structures on offer, and less room to change them.
The bank column reflects typical bank equipment-financing terms. Individual offers vary, and every application is subject to credit approval.
TAXES
Where the tax advantage comes from
Two things are usually at work. A lease payment is generally an operating expense rather than a capital purchase, so it comes off the income statement in the year you make it instead of being depreciated across the life of the asset. And where the lessor holds the tax benefits of ownership, those can come back to you as a lower monthly payment.
Section 179 is the other half of the picture, and it applies to financed equipment as well as equipment bought outright.
Confirm it with your own accountant
How a particular lease is treated depends on how it is structured and on your own tax position. American Capital Group is an equipment finance company, not a tax advisor, and nothing on this page is tax advice.
Tell your CPA which structure you are considering before you sign. If it would help, we will put the proposed structure in writing so they have something concrete to look at.
Three steps to your equipment
01
Fill out an application
Complete our simple, one-page application. No mountain of paperwork.
02
Receive a custom plan
We contact you, typically within 24 hours, with a lease structure tailored to your needs.
03
Get your equipment
We purchase your new or used equipment from any vendor you wish.
Newer business, or no financials to hand? We have programs for both — startup financing and no financials required.
FREE QUOTE
Get a custom quote in minutes
Tell us what equipment you need and roughly what it costs. An ACG specialist follows up, typically within 24 hours, with options built around your business.
Business equipment financing. $10,000 minimum. We do not finance personal or household purchases.
- — NO OBLIGATION, NO HARD CREDIT PULL
- — NEW OR USED, ANY VENDOR
- — OR CALL (949) 822-3017
Keep reading
What we finance
Medical, construction, kitchens, machine shops, IT — and the rest.
Common questions
Terms, end-of-lease options, credit, and what we need from you.
Estimate a payment
Enter an equipment cost and see roughly where the monthly payment lands.
Our customers
Businesses we have funded, in their own words.
Want the equipment running before the first payment? Ask about 90 days deferred. Weighing it against a bank? Lease it, or borrow to buy it? sets the two side by side, and what moves your payment covers the number itself.
Decided? It is one page.
31 years financing equipment for small business. Apply, or call and talk it through first.