Professional Funding Company: Specialists in Equipment Financing and Leasing. Manufacturers, Medical, Packaging, Construction, CNC, Machine Tools, and All Other Business Needs. We Can Refinance and Finance Working Capital Loans

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Professional Funding specializes in Equipment financing and leasing. Many companies need to secure capital for equipment to expand their business but aren’t sure of the financing options. We offer a simple overview of Leasing and Financing for equipment or business assets. It is an overview of the programs so your company can be informed and aware before making a decision on the best program for your company. Easy simple read for both purchasers and Suppliers. Brief read on the following:


Conserves capital

Allows for positive cash flow

Protects your personal credit score

Preserves Credit Lines and Loans

Allows equipment to generate income and pay for itself. Who pays an employee 100% of their wages upfront. Equipment can be used to streamline employee costs and increase productivity. So why Pay for The Equipment service upfront vs. during the useful life of the equipment?

For established businesses, the equipment can be financed with a one-page application and minimal documentation. For start-up businesses or challenged credits, additional information may be requested.

This information may include:

Business and personal tax returns for the previous two years

Personal Finance Statement (PFS)

Recent bank statements or a bank reference

This additional information may be required to achieve the best possible financing package for your business and can often make a difference in your monthly payment amount.

Loan Approval
Equipment Financing and Leasing Overview

**Equipment leasing or financing is a 100% financing as most agreements require first or first and last down only. **(It is always best to ensure this is an actual payment, not a security deposit. However, note for newer businesses or challenged credits the approval may require a 10-20% downpayment or deposit, but this structure allows many companies that normally wouldn’t qualify for a lease or finance agreement to secure equipment financing.)**

**Finance 100% of the equipment purchase price including ancillary costs like software, training, installation, and shipping.

**Preserves your personal credit. Equipment Leasing and Equipment financing do not impact your personal credit score or report to your personal credit bureau with the exception of the initial credit check. However, many companies pull Soft Credit Pulls, to preserve the clients’ personal credit score.**( Ask your lender if they pull a soft or hard credit before your final approval.)**

**No Lien on Business or Business assets other than the financed asset. Preserves your Business lines of credit. Equipment Leasing and Equipment financing keep your bank and other business credit lines protected because most funding sources only lien the equipment, software, or business asset being financed. **(It is important to ask your lender what their lien process is to ensure your business lines are protected.)**

**No lien on personal assets or impact to your personal credit score or report. The equipment or asset will be used as the collateral and a lien will only be filed on the business asset financed in most instances. **(It is important to verify this with your lender and ensure it is in the contract.)**

**Offers a fixed monthly payment for a pre-determined timeframe, allowing your company to better project future cash flow.

**Offers flexible terms and payment structures available, including stepped payments of small monthly payments at the beginning of the lease with larger payments when the equipment begins to generate income. Or seasonal low payments if your business is seasonal.

This flexibility of equipment financing and leasing, combined with the fact that leasing equipment will not impact your personal credit or require additional collateral other than the leased equipment itself, makes this type of financing the optimal choice for many business owners purchasing equipment, software, IoT, transportation, and other business assets.

Types of Leases

EFA(Equipment Finance Agreement)

The EFA is the main type of equipment financing most companies utilize. There are many advantages including low or no down payment but the most important advantage is that an EFA allows the business owner ownership of the equipment on Day 1 of their Finance contract. Due to the Section 179 accelerated tax depreciation available in 2021, many companies will choose the EFA or the $1 out the lease(see below on $1 out lease and Section 179). This is a preferred method as it allows for the full amount of the equipment to be depreciated in year one through the Section 179 depreciation deduction. This Equipment finance program has no purchase option or buy-out at the end.

$1 out lease

The $1 out lease is simply a $1 out purchase option at the conclusion of the lease. This lease qualifies for Section 179 accelerated depreciation as well. The only difference is this lease gives the lending entity the option to automatically renew the lease at the end of the lease term. The lessee may be required to notify the underwriting entity at a predetermined time listed on the contract of the intent to pay the $1 and purchase the equipment. Thus if the client forgets to notify the lending entity their equipment lease could be automatically renewed for a preset amount of time as defined on the lease contract. When selecting a $1 out lease it is imperative to read the contract thoroughly before accepting the terms. This Lease structure does qualify for Section 179 accelerated depreciation.

10% PUT(Payment upon termination)

At the conclusion of the lease, you pay one final payment of 10%. Some companies may allow for a higher PUT to keep payments lower during the payment stream. This option allows for lower monthly payments during the term of the contract. The PUT is not an option but a required final payment.

FMV Fair Market Value

Monthly payments are made according to the lease terms, but at the end of the term, the lessee has the option to either return the equipment to the finance company, pay the Fair Market Value of the now used equipment or continue to lease in annual increments. The FMV is determined by the lender according to the terms of the lease. If the return option is chosen by the lessee, the lease agreement specifies how and where the equipment must be returned.

There are many issues to be aware of with FMV Equipment Leases, see below:

The lending entity retains ownership of the equipment. Due to the high Section 179 tax accelerated depreciation available for businesses, this could impact your tax write-offs and you should consult your CPA before accepting an FMV Lease.

The lending entity decides the FMV at the conclusion of the lease. Many business owners over the years have learned the hard way that this is an open-ended residual that could have upwards of 20-50% of the original purchase amount of equipment required to own equipment at the conclusion of the lease. Companies offering this program use advanced accounting methods to benefit from ownership of the equipment. In most cases, those same benefits are available to your business. This program is best secured for assets that you do not want to own at the conclusion of the lease and/or that you do not want to use depreciation accounting methods during the term of the contract.**(I highly advised business owners to speak to their CPA before signing an FMV lease.)*

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