Time of Year

For those who are looking, often times there are very good deals out in the market place. Depending on the time of year and the lender/lessor a business is working with, discounts can be available on an equipment lease.

If a lessor is reaching the end of year and they have not met their maximum amount of depreciation expense allowable, they may be willing to discount the interest rate charged on a true operating lease in order to get more leases (and depreciation) on the books. Who is the winner here? Both of you. The lessor gets to pay less in taxes because they are offsetting earnings with deprecation. And you, the business owner can save big on your interest rate and thus, lower your monthly payment.

This type of arrangement does not work with a capital lease, but it will work with an operating lease. This is so because in an operating lease, the lessor is the one holding the equipment on their books and receiving the depreciation expense. But if your business does not need the depreciation, go for it. The savings can be worth it.