State investor suitability rules apply – not suitable for everyone.
An Equipment Leasing Trust gives the investor an opportunity to invest in the business essential equipment that a company may need to operate. Without the equipment, the business could not run, thus making the lease payments a priority for the company.
Equipment leasing programs offer an alternative to investments subject to the volatility of the stock market. This type of program creates income from the lease payments, which is paid out in the form of dividends. They are usually illiquid investments that require a longer time commitment. However, that commitment may potentially provide a platform for greater stability and pay the investor a higher than a normal dividend. Since the equipment is a tangible and durable asset, the investor may also generate additional distributions if the equipment is leased or sold again.
What’s in it for the company?
- Equipment Leasing offers businesses an alternative to purchasing extremely expensive equipment that in many cases become obsolete over time.
- With lease payments often lower than purchase payments, it gives companies greater flexibility with their capital and ability to use it elsewhere.
- Unlike bank loans, lease obligations do not appear as debt on the company’s financial statements, thus making the company more attractive to investors.
- Businesses have the ability to write off lease payments over the course of the lease whereas an outright purchase of the equipment requires a depreciation schedule over five years.
If you are interested in more information on equipment leasing, please call us at 888-265-7443.