Major Considerations for Lease-Financing Versus Traditional Bank Financing

Traditional Bank Financing generally requires a “Blanket Lien” on all of your assets.

Traditional Banking tends to create Co-Mingling of assets and places the owner in a vulnerable position should liability suit be filed, because it is YOU, that they may go after now, not just the company.

Traditional Financing requires your books to be open to the bank at all times, and requires a “Bank Review” every 6 months.

Traditional Bank Financing, if not satisfied with books, they have the option of increasing your interest rate depending upon their comfort level with your exposure.

When securing Traditional Financing, you are reluctant to taking on additional financing due to the bank flagging you as over exposed. This stagnates your ability to grow the business.

When securing Traditional Bank Financing the bank pulls your credit report every 6 months and reviews to their satisfaction.

Traditional Bank Financing may require you to submit Interim Financial Statements and Balance Sheets.

Lease-Financing “DOES NOT” appear on your D&B, Paydex, or bank review as added debt, therefore it does not increase your debt ratio.

Lease-Financing is considered Pre-Tax Dollars therefore reducing your tax burden on profits of your company.

Lease Financing is considered a Direct Operation Expense, therefore the full amount of the monthly payment may be written off on your P&L.