Differences Between Leasing and Bank Loans

There are numerous differences between leasing and bank loans. A few of these are as follows:


Down Payment:  With Leasing merchants have equipment that is 100% financed.  With a Bank Loan, more often than not, merchants will have to come up with 20% to 30% of the total cost of their loan amount.

Interest Rates:  With Leasing, merchants have a fixed rate and a fixed payment.  With Bank Loans, merchants are often seeing an adjustable rate.

Term:  Equipment Leasing through ExecuTech gives your company the option of Leasing for a term of 12 months to 60 months (1-5 yr).  With Bank Loans, most are standard 2-3+ year loans.

Financial Reporting:  Leases are not required to be reflected on balance sheet as debt.  With a Bank Loan it will be carried on balance sheet as debt.

Tax Benefits:  Leases are usually fully deductible over the term of the lease.  Bank Loans are depreciated over the IRS's life of the equipment.

Cash Flow:  Leases help to free up cash allowing you to invest further in your business unlike a Bank Loan where your capitol is tied up in bank lines preventing expansion.

Sales Tax:  With a Lease your sales tax is financed with monthly payment, however, with a Bank Loan it must be paid in advance.