Off Balance Sheet Financing
Certain types of lease financing (operating/closed end per FASB 13) are not shown on the balance sheet. Therefore, these leases do not raise the debt to equity ratio nor impair the borrowing capacity of your firm. Additionally, lease financing may also provide significant tax advantages depending upon a few key components of your lease transaction. While the tax effect may vary by company, please feel free to ask your TBBK Direct Leasing Sales Executive for specific details on how leasing may benefit your company’s tax situation.
Conservation of Capital
Simply stated, lease financing conserves working capital. Whether you currently own your vehicles outright, or if you bank finance them, a TBBK Direct lease frees up working capital for re-investment in your business, without impacting existing credit lines. Additionally, unlike many bank loan arrangements, no compensating balances or down payments are required.
Unlike many bank-financing scenarios, leasing may allow your company an added degree of flexibility. Many lending institutions typically impose restrictions upon future financing, whereas leasing usually will not impose such restrictions.
Leasing facilitates cash budgeting. By permitting accurate prediction of cash needs, compared to the financing of asset acquisition with short-term borrowing, leasing converts a possible major cash outlay into fixed budgetable monthly payments.
TBBK Direct Leasing provides leverage based on volume to help lower the initial acquisition cost of the vehicles you require. We apply our experience and expertise in obtaining additional discounts and incentives to lower the cost basis of the vehicles in your fleet.