| Flexibility of Financing | Doesn’t allow your customer to add more equipment/services based on the Total up-front cost. | Our business is convenient. We are service oriented. We offer lease programs up to $75,000 without financials. Often we can approve your equipment lease with just our simple, 1 page application. | Regardless of the amount requested, most banks won’t begin to review your credit until you supply a full financial package. |
| Ease of Approval Process | Not applicable in a cash sale. | Southlake Capital turnaround time for a credit decision is typically within 24–48 hours under $75k. Over $75k, typically 2–4 days. | A bank may take days or even weeks to approve a loan, especially today, if they will consider it at all. |
| Balance Sheet Implications | Decreases cash flow immediately. | Leased equipment is considered an “expense” on operating leases. Such assets do not appear on balance sheets which improves financial ratios. | Banks require owned equipment to appear as an asset on budget sheets which will affect your line of credit. |
| Effect on Bank/Credit Lines | Consumes most of the customer’s budget up-front as a cash sale depletes their bank account of income-earning funds. Cash is King! | Customer’s bank line of credit is not affected and Southlake Capital can be utilized as an additional source for all equipment needs. | Bank lines of credit/loans may be tied up and unavailable for future needs. Bank also could place a lien on all assets. |
| Restrictive Covenants | Not applicable in a cash sale. | Generally, there are no such restrictive covenants. | Bank loans often require that the borrower maintain certain minimum financial ratios and report them to the bank on a quarterly or semi-annual basis. If the borrower fails to maintain those ratios, the bank can call the loan. They can also place restrictions on or limit future borrowings from any institution. |
| Upfront Cost | You must pay the full cost of the equipment at time of sale. | Able to finance the complete purchase including soft costs and sales tax. Out-of-pocket costs are usually limited to the first month’s investment. | Banks usually require the customer to pay a down payment between 20-40% of the equipment cost, exclusive of soft costs such as shipping, installation, training, etc. |
| Upgrade or Adding Equipment | Up-front purchases reduce the possibility of a customer spending more on a future sale. | By offering a monthly payment, your customer can afford more equipment without the large up-front budget cost. Southlake Capital can also process the application quickly since he/she is a repeat customer. | Customer must re-apply for a new loan to add new equipment. Most banks also will not allow the customer to roll in services (i.e. maintenance, shipping, installation) into their loan. Leases do allow it. |
| Available Terms | Not applicable in a cash sale. | In most cases, you choose the terms and purchase option of your equipment lease. We offer up to 60-month terms on most equipment and up to 84 months on some harder asset classes. | Banks tend to be somewhat less flexible than leasing companies. That’s good if you are looking for a standard term, not so good if you need flexibility. Typically, will only go up to 48 months on equipment loans. |
| Tax Advantage | Depreciate over its useful life. Depletes cash flow immediately. Additional out of pocket expense. | Can be structured to be an Operating Expense paid with pre-tax dollars and takes advantage of shorter depreciation schedules. | Usually desires a floating rate. Depreciate equipment over its useful life, typically 5 to 7 years. |
| Equipment Types | Not available in a cash sale. | Our funding resources capability ensures we can finance most equipment types. | Banks won’t finance equipment they don’t understand or feel has limited collateral value. |
