Intellichoice Energy has assembled key financing partners to allow our clients the ability to finance their ICE Equipment purchases, from the simple purchase of one unit, to a level of $1 million dollars for appropriate clients. This includes both loan and lease structures, depending on our client’s needs. Some might ask, “Why would I want to finance the purchase of ICE equipment?” There are many positive reasons to finance ICE Equipment, including the following:
- ENERGY REDUCTION HELPS PAY FOR THE EQUIPMENT – By financing your equipment, your payment is partially offset from day 1 by the resulting reduction in your electric energy bills that ICE Equipment provides you;
- TIME VALUE OF MONEY – Finance people realize that a dollar today is worth more than a dollar years from now. Financing takes advantage of this fact;
- CASH FLOW – The preservation of cash flow compared to conventional financing is the most attractive benefit of leasing equipment. A “true” lease can offer low cost financing because the lessor takes advantage of tax benefits that are passed to the lessee in the form of reduced payments. If the lessee cannot currently use tax depreciation to offset taxable income due to current operating losses, loss carry-forwards or alternative minimum tax, depreciation benefits may be effectively lost forever if the lessee purchases rather than leases.
- CONVENIENCE/SPEED – An equipment lease/finance transaction in many cases can be executed and completed in less time than traditional financing alternatives.
- CONSERVATION OF CAPITAL – Leasing doesn’t require the cash outlay for a large equipment purchase and can be used to overcome budget limitations. Existing cash position and lines of credit remain free and liquid for other working capital needs that have higher ROE and or ROA metrics.
- 100% FINANCING – Leasing provides 100% financing while a typical equipment loan requires an initial down payment. Most “soft” costs incurred in acquiring equipment can be financed by the lease. These costs include delivery charges, interest charges on advance payments, sales or use taxes, installation and training costs. Such costs are not usually financed under alternative methods of equipment financing.
- TAX ADVANTAGES* – A lease can be structured either on or off balance sheet. As an expense, lease payments reduce tax liability and can be structured to qualify as an operating lease under FASB 13 for financial reporting purposes. The choice depends on your accounting objective and other cost trade-offs that you are willing to make in order to achieve your strategic objectives.
* Always consult your tax advisor as to any tax advantages that may be available with leasing.
NOTE: Financing of ICE Equipment is through third party lenders, and financing depends on the individual or company’s credit risk and assessment by these lenders.