Equipment Financing: Is it Right for Your Business?

June 27, 2014 at 6:44 PM

To better manage operating expenses and cash flow, many business choose equipment financing.

With the many different funding options available for your businesses, don’t overlook the importance of equipment financing. 

What is equipment financing? 

Sign Up for E-News

Equipment Financing

  • ​An equipment lease (operating lease) provides an affordable alternative to purchasing your required equipment compared to using a bank loan or another financing solution.
  •  An operating lease is a lease whose term is short compared to the useful life of the piece of equipment; for example an ultrasound machine which has an economic life of 8 years or more may be leased to a medical practice for 3 years with the operating lease.
  • The equipment is leased for a monthly fee for an agreed period of time. At the end of the lease term the equipment can be returned, or purchased at a pre-agreed price where the rent payments count towards the purchase price.


  • Credit Preservation - A lease is not a loan. Borrowing reduces lines of credit. Leasing is a new credit source, increasing borrowing capacity.
  • Capital Conservation - When capital is conserved by leasing equipment, it can be put to more profitable company uses (increasing inventories, expanding sales, etc.).
  • Includes Acquisition Costs - Your lease payments can also include the costs of delivery, installation, software, and other service charges.
  • Financing is Off Balance Sheet- Leases may sometimes be treated as off balance sheet debt which can enhance financial ratios & borrowing capacity.
  • Minimize Obsolescence - Structured leases can allow upgrade and trade-up options insuring the latest technology.
  • Tax Benefits - Lease payments can sometimes be treated as a direct expense, which allows the equipment to be paid for w/ pre-tax dollars. Bank financing only allow expensing the interest costs & depreciation.
  • Flexibility - Leasing provides fixed rate financing with specifically structured terms to accommodate the needs of each and every company. These structured leases include step-up, step-down, deferred, and seasonal payment plans.

Businesses lease equipment because leasing represents the best use of their financial resources.  This often increases productiviy since they can utilize newer equipment. Using older outdated equipment is often more costly to run and less productive placing you at a competitive disadvantage.

Please consult with your Accountant or Tax Advisor.  It is important to keep in mind:

  • Your company’s specific needs as they relate to future growth
  • How long you want to use the equipment
  • What you intend to do with the equipment at the end of your lease
  • Your tax situation
  • Cash flow

ALCS Capital specializes in assisting small business owners to obtain the financing that they need to grow their enterprises, but that may not be available through traditional banks. ALCS can customize financing options for small, medium and large sized businesses with a broad portfolio of financial products to provide strong working capital solutions.  The company offers financing solutions of all types: Commercial Real Estate Loans; SBA Financing; Medical Financing; Unsecured Lines of Credit; Business Acquisition Financing; Franchise Financing; Start Ups; Equipment Leasing; Sale Leasebacks; Accounts Receivable Financing; Hotel Financing; Stock Loans; Purchase Order Financing; Bridge and Hard Money Loans; and more, including specialty finance products. We offer free business consultations to help businesses meet their objectives. For more information visit

The opinions expressed herein are the writer's alone, and do not reflect the opinions of or anyone who works for is not responsible for the accuracy of any of the information supplied by the writer.

TAP Into Another Town's News:

TAP Into Another Town's News:

Sign Up for E-News


Condominiums Will Replace Lawnmower Shop in Clark

December 2, 2016

CLARK, NJ – A seven-unit condominium building will soon stand on the site of the Clark Power Equipment property at 1132 Westfield Ave.  The Clark planning board voted unanimously in favor of an application presented by Vincenzo Associates at its meeting Thursday night.

Site engineer Edward Dec said the single seven-unit structure is a better use of the lot’s size and shape ...

Westfield Police Blotter: DWI with Child in Vehicle, Home Burglary Reported

November 30, 2016

November 25, 2016 2:05 p.m.

Officers Domanoski and Penn arrested Kenneth T. Oakes, age 39, of Scotch Plains, NJ, for possession of marijuana under 50 grams and possession of drug paraphernalia subsequent to a motor vehicle stop. Mr. Oakes was transported to WPD, processed and released with a summons.

November 26, 2016

Officer Domanoski and Ferry arrested Brenda Titus, age 41, of Newark, ...

College Men's Club of Westfield Holds Third Annual Texas Hold 'Em Tourney

December 1, 2016

On Nov. 19, the College Men’s Club of Westfield held their third annual Texas Hold ’Em Tournament at the Kenilworth Veterans Center, where they raised money to support their mission of providing college scholarships to deserving young men in the local community. The winners were Vincent Coyle, first place; Brian Boufarah, second place, and Mark O’Brien, third place.

The ...

Register for Westfield Area YMCA's Programs and Get More Than Exercise This Winter

The Westfield Area YMCA’s Winter program registration begins at 6:00 pm on Thursday, December 8th for Gold and Silver members and at 7:30 am, Monday, December 12th for Program and Non-Members.  The Winter Session runs from January 2nd-February 25th.

New classes for adults this winter include: Cardio Strength Blast, Cardio Strength High Intensity ...

Holy Trinity School Spotlight - Kindergarten

At Holy Trinity School, Kindergarten is cool!  In Kindergarten, students learn the fundamental skills necessary to thrive in a school environment. The Holy Trinity Kindergarten is a full-day, faith-based program focused on reading readiness, language development, math, and science concepts.   Students also take part in several special classes each week that include music, library, ...

GWACC (Greater Westfield Area Chamber of Commerce) Invites the Chamber and Community Members to Enjoy a Trip to Pompeii & the Amalfi Coast

GWACC has announced today that it will be visiting irresistible Southern Italy & Amalfi Coast, departing Oct. 11, 2017 and is inviting chamber members, and family and friends of chamber members to join them on this once in a lifetime experience.

Rich in culture and stunning scenery, irresistible Southern Italy is the setting for this breathtaking journey. Enjoy an eight day ...

My Epic Beauty Fails

One day as I was looking around a high-end cosmetics store for a new lipstick, a “beauty expert” approached me and said that I was so stunning I should forget the lipstick, and get a lip plumper instead. At first I wondered why I needed a lip plumper if I was already so stunning. But then I thought, “Now here is someone wearing a badge that says, ‘beauty expert,’ so ...

Dog Found in Fanwood

Update: Reunited with owner!

Original post: This dog was located by Fanwood police on Terrill Road Nov. 25. If you know him, call the Fanwood Police Department at 908-322-5000. The dog has no collar, no dog tag and is not microchipped. Police believe he is from Plainfield because of where he was found. 

Tamaques Elementary Launches New 'Makerspace' Initiative

With the objective of fostering students' critical thinking, imagination and creativity, Westfield Public School librarian Christine Pitarresi has spearheaded a new program at Tamaques Elementary, called "Makerspace." Observing current trends and needs for growing minds, Ms. Pitarresi enthusiastically noted, "We used to be a society of makers, now we are ...

Lindabury Bolsters its Commercial Real Estate and Finance Practices

Lindabury is pleased to announce the addition of attorney Amanda M. Curley to its Business and Commercial Real Estate practices. Amanda will focus her practice on commercial real estate financing and related transactions.  Amanda has experience advising commercial real estate owners and developers on transactions, redevelopment law and land use matters.  She also is well versed in New ...

Bodnar Auctions Unlocks Time Capsule of Museum-Quality New Jersey Americana Collected by Navy Seal

November 28, 2016

EDISON, NJ - A museum-quality sale of New Jersey Americana accumulated over a lifetime by a former Navy Seal will be sold at no reserve during Bodnar Auction’s Dec. 3 sale at the New Jersey Convention & Exposition Center.

Separate and apart from the Navy Seal’s collection are 46 vintage maps from a separate estate, including 19th-century maps of Somerville and ...