A Standard Lease typically requires the first and last payment up-front and then a level monthly payment for the term of the lease. Terms may range from 24 to 60 months. A Step Up Lease is typically utilized for higher priced equipment (over $75,000). Payments can start low, then "step up" to a normal payment. This permits the lessee to acquire the equipment and put it into production without significantly impacting cash flow initially. Skip Payment is an option for seasonal businesses. A lessee agrees to a schedule that requires payments only on certain months of the year. This permits cash flow to correspond with the payment schedule. Deferred payment can be used for businesses acquiring income-producing equipment. With the deferred payment program, a lessee has 90 days to utilize the equipment before the second payment becomes due.
Fair Market Value: One option is to purchase the equipment for its fair market value at the end of a lease term. Fair Market Value Leases are appropriate should you anticipate the value of the equipment to decrease at an accelerated rate over the terms or should you anticipate the need to update / replace the equipment at the end of the lease term. Fixed Purchase Options: metrix imageFixed purchase options are appropriate if you prefer the flexibility of a FMV lease and wish to cap the equipment buyout at a certain percentage of the equipment value. Common buyout options are 10-20% of original cost. $1.00 Buyout: metrix image This option permits purchase of the equipment for $1.00 at the end of the lease. This permits the lease to be treated similar to a conditional sales contract. A $1.00 Buyout can be advantageous if you expect the equipment to retain its value over the life of the lease and you expect to retain use of the equipment thereafter.
There are many types of leases and various descriptions of them, some of which are/aren't recognizable and utilized on a day-to-day basis. Below outlines the most common leases you're likely to encounter: Capital Lease - A capital lease is used when you desire equipment costs that are fixed at end of the lease (typically a $1 purchase option). Capital leases must be disclosed as an asset and related obligation on your balance sheet. From a financial reporting perspective a capital lease has the characteristics of a purchase agreement and usually does not offer favourable financial statement ratio's for the purpose of seeking bank credit lines versus a True Lease. Commercial Lease - A lease transaction for business or commercial purposes. Consumer Lease - A lease transaction for personal, family or household purposes. Finance Lease - A general term applied to most types of equipment leases. Typically a finance lease is a full-payout, non-cancellable agreement with the lessee is responsible for maintenance, taxes, and insurance. Gross Lease - A transaction which a lessee would be liable for insurance, property taxes, maintenance expenses. Net Lease - A transaction where instalments remitted to the lessor excludes insurance, taxes and maintenance. These are paid separately by the lessee. Maintenance Lease - A transaction where leasee has an obligation to maintain the equipment in good functional and working order. Operating Lease - For accounting purposes, an operating lease is any lease which is not a capital lease; thus it is not required to be reflected on the lessee's balance sheet. These have the characteristics of a usage (rental) agreement and are typically applied short-term leases of equipment. Lessee may acquire the use of equipment for just a fraction of the assets useful life. Service Lease - Lessor provides complete service, maintenance, and care for the leased equipment. True Lease - Permits Lessee to expense lease payments, thereby reducing tax liability. Companies may use a True Lease when acquiring the use of equipment under an operating budget or when looking to limit alternative minimum tax liability or simply to minimize it's tax liability. True Lease is also typically accounted for "off balance sheet" in your financial statement. Should Lessee choose to purchase the equipment at the end of a lease, they may capitalize the purchase and take further deductions.
There are several advantages to leasing an asset versus obtaining a loan and/or purchasing an asset outright. Following is a list of some of these: Read our Lease vs Loan section Start up Business Loans Reduced cost: A Lease offers you a fixed payment structure that can better fit your budget - compared with variable rate financing that can be unpredictable over the term of the loan. You secure use of the equipment you require at today's rates versus a potentially future escalated rate. Your payments can be tailored toward the use of the asset and not it's ownership, thus your cash is leveraged to support working capital requirements. 100% financing: There is no down payment required with 100% financing. This makes cash available for use in other areas of your business permitting a more focused approach toward growth. This permits you to leverage the use of the product/services leased to generate revenue and additional cash flow during the lease term. Credit Preservation: Your existing lines of credit are unutilized which preserves your borrowing capacity. Leases can also be structured without any restrictive covenants. Off-balance sheet financing: Your company's financial ratios - such as ROE (Return on Equity) and ROA (Return on Assets) - look more attractive when you lease versus borrow. Tax advantages: Your lease payments can be structured such they are considered an operating expense, which could permit you payments to be totally tax deductible. Through equipment leasing you can avoid the alternative minimum tax trap caused by paying cash for equipment, using accelerated depreciation to optimize your tax benefit. Both Flexible & Convenient: A broad range of services can be covered under lease, such as service/maintenance contracts, insurance, freight, installation, training, and taxes. Leases can be structured creatively to meet your specific business and financial needs.
A step up lease is usually used for higher priced equipment that is valued over $75,000. The way this works is that your payments will start out low, then "step up" to a normal payment. This allows the person that is leasing the equipment to acquire the equipment without significantly impacting cash flow when you need it.
Eighty percent of companies in America lease all or some of their equipment acquisitions. Each year more companies, particularly small ones, choose to acquire new equipment through leases rather than loans.
- You want to lease equipment because you do not want to put a dent in your cash flow by investing all of your money into a depreciating asset. When you lease, you are offered more flexibility with your budget and also have the option to purchase the equipment at the end of the lease.
- Matrix Business Capital has an experienced team that is specialized in funding, accounting, finance, credit, as well as helping established businesses, start ups, and organizations with credit issues. We have our own internal credit line, regional investors, and investment groups that will help lease the equipment that you need. If you can justify the need of a equipment, we will find a way to get it financed.
The steps of the process will vary depending on how good a client's credit is. Professional clients with top credit scores can fill out a 1-page application and, after approval, obtain equipment funding within 2-5 business days. Clients with lower credit ratings or less business experience will need to take a few more steps, but even the most challenging cases will usually take no more than 7-10 business days to receive approval.
A lease is a financial transaction that can permit you to conserve cash. A lease agreement rents the asset over a specific period at a fixed payment amount which is reflected in the agreement. This permits the acquisition of required asset while avoiding the outlay of cash.
Yes, we do in fact provide capital for start ups. We may fund more start ups than any other company in the US. Most banks will not get involved until a business has hit the 5 year mark. Because we are focused more on the revenue generating equipment for the business, Matrix Business Capital can be much more flexible than traditional institutions.
Some costs include location, credit score, how long you have been in business & collateral. Matrix Business Capital owns the equipment that is leased there. This results in competitive rates against traditional banks.
Typically, Matrix Business Capital can offer financing for leases starting at $5,000 and go all the way up to $5,000,000. While we can offer financing outside of those numbers, 80% of our business will fall into the $5,000-$250,000 range.
Some recent success stories include securing funding for a business with challenged credit, obtaining high value investments & fighting through tax liens.
Leasing in and of itself is a form of cash flow management, however we can also offer a number of options to help you better manage your finances. One way is to offer a 90 day referral to allow your equipment to start generating revenue for you before having to putting regular payments into it.
One advantage that Matrix Business Capital has is that the equipment that is getting leased out is actually owned by Matrix Business Capital. This creates much more flexibility than a traditional bank might have.
There are a number of leases available to a business. The most common being a Capital Lease where the equipment is purchased for $1 at the end of the term. For the business that is concerned with keeping equipment off of a balance sheet for tax purposes, an Operating Lease would be most attractive.
CEO Brian Acosta started in 2000 and was in telecommunication for 5 years. Wanting a new industry, he got interested in financial after realizing that solving problems for business owners in terms of finance was very rewarding. He then went to a different group for 5 years and from the experience he gained, he started Blue Star Capital with the two subdivisions: Matrix Business Capital & Ability Capital Solutions.
At the end of your lease, you can buy end up owning the lease or you can do a fair market value lease when at the end of your term, you purchase the equipment for the value of at that time.
Some advantages of leasing equipment include: leverage for your organization to focus on other important tasks, a simple application process & preserving operating capital by not spending on depreciating assets.
Depending on the business and the specific needs, leasing can be better for a variety of reasons. For example, if you lease, you do not have to worry about buying equipment with a high cost. You get to keep the resources handy for operational purposes.
Why should you choose Matrix Business Capital? Matrix Business Capital prides itself in its 14 years of experience and ability to solve problems. With valuable relationships with most major banks, non-traditional financial institutions & private investors, Matrix Business Capital puts care and compassion to help achieve long term goals.
what clients are saying about matrix business capital
To whom it may concern, Our Company Mac Rak Inc is a manufacture of Rack repair and protective guarding for any warehouse environment. We found that our business would greatly improve if we could take our powder coat paint process and bring it in house. We needed to improve our lead times and provide a quick ship program to our...Read More
To Whom It May Concern: Recently my company needed money to bridge the gap while waiting on an SBA loan to come through. We needed $150,000 for equipment that was being sold from a company in Mexico that had to be paid in advance before they would ship the equipment. We also needed about $150,000 for working capital. Being a start-up...Read More
Matrix/Ability contacted me back in 2011 offering me financial lending for working capital for business expansion, or lease/purchase funding for new equipment. I was very cautious and skeptical at first not wanting to be a victim of a scam. The team at Matrix/Ability put my mind at ease and I decided to give them a chance. The team contacted me on...Read More
To Whom It May Concern: I was in the process of opening a new dental practice and had the funding pulled out from under me due to some credit challenges that were in the process of being resolved. I was given the number to Brian Acosta at Matrix Capital, and without much hope of success due to my recent experience, I called him. Brian is a very...Read More
15 South Road, Brewer, Maine 04412 – SpringValleyWater.com To whom it may concern, I am in the water bottling industry. I worked with Matrix/Ability back in 2008, when they helped me finance $25,000 in water coolers. I had a good experience working with them and at the time my credit was perfect. In 2011, I tried working with another...Read More
Rodney Rambo and Erik McDonald at Matrix Business Capital MAKE IT HAPPEN! It takes other finance company’s days to do what Rodney and Erik make happen in hours. If you’re looking for World Class customer service and great teamwork, then look no further. They are great communicators, very attentive, hard working, and kept things moving...Read More
Living Naturally is the largest online natural health network in the world, providing online commerce and promotional systems to more than 3,000 natural health retailers and suppliers in North America. Living Naturally has been working with numerous leasing companies in the past, but found that Matrix Business Capital provided the best, most...Read More
I am a fuel distributor based in Waco, Texas. I needed a Passport point of sale system and signage for my gas station. The equipment enables me to take credit card payments when selling fuel. The system cost $23.000. Because my business has a highly diversified ownership, the finance companies that I had spoken to were unable to...Read More
To Whom It May Concern: October of 2013, Skyhigh Building Maintenance, were interested in purchasing a piece of equipment. The equipment was a 2006 Genie S-80 boom lift. At the time we had not heard of Matrix Business Capital. They were referred to us. Upon my dealings with Matrix, I found them to be responsive. If I had to leave...Read More
We had an excellent experience working with Matrix Business Capital. We worked with Erik McDonald and Rodney Rambo and they communicated throughout the entire process and kept us informed. We used multiple vendors on the transaction and they were very flexible in accommodating our needs. Our transaction went smoothly from beginning to end. We will...Read More
Matrix Business Capital allowed us to grow and expand our business by double by working with us to obtain the equipment and capital we needed to grow. They were very attentive to our needs, and a pleasure to work with. They helped us finance over 50k of studio equipment, and worked with our Vendors to make sure we were happy. We've been working...Read More
8/14/15 To Whom It May Concern: I am the executive director of Smooth Transition, Inc., a 7 year old, nonprofit 501(c) 3. Smooth Transition, Inc. serves to provide "at-risk" populations a path toward educational and employment opportunities thus enabling them to lead fulfilling, prosperous and purposeful lives. Our recent project was to...Read More
To Whom It May Concern, Matrix Business Capital was able to help us fund $535,000 on a Sale Leaseback transaction to get us operating capital. Our music theater company was founded in February 2011 by a group of nationally and internationally recognized creative visionaries passionate about producing the best in live theatrical and musical...Read More