Strada Capital Business Finance Blog

Strada Capital Corporation announces expansion of their management team with the hire of Melissa Fisher

Strada Capital Corporation announces expansion of their management team with the hire of Melissa Fisher, a leasing veteran with more than 20 years of leasing and management experience.  Fisher brings an almost unprecedented track record of leasing industry success.  “We’re thrilled to add someone of her caliber and experience,” says Bradley A. Kissler, president of Strada Capital.  “The current credit environment requires no less than super hero capabilities and we came as close as possible with Melissa.” 

Strada Capital is focused on growing its vendor originated business, which has prompted a bolstering of staff.  Melissa Fisher will oversee credit and operations as Strada Capital prepares for the upcoming increase in volume.

Avoiding Bank Restrictions with Equipment Leasing

Leases don’t include blanket liens, restrictive covenants, rate escalator clauses, “call anytime” provisions, compensating balance requirements (a five year 6% loan with a 20% compensating balance requirement actually yields about 15.7%) or any of those other nasty little surprises that tend to be part of traditional lending arrangements.

Equipment Leasing Offers Flexibility

Equipment leasing allows you to write off the costs of your present equipment as you use it, and to trade up to new technology when the time comes.

Equipment leasing is an extremely flexible tool. It can be structured as anything from a rental (think “car rental”) to a time purchase (think “lease to own”). For this reason, there are many different benefits of leasing and an equal number of motives as to why people lease.

Protect Your Bank Lines with an Equipment Lease

Banks are great for short term needs and you should use them in that way. An available line of credit is an extremely valuable tool to address unforeseen emergencies, therefore reducing those open lines by using them to finance equipment can be dangerous. Furthermore, bank terms, appetites and flexibility on equipment transactions range from “less than optimum” to “downright difficult”. Let your bank do what it does best.

With an equipment lease, you can get approved for up to $150,000 with a simple one-page application; and in some cases, you can get up to $250,000 with just the application.

In summary, utilizing an equipment lease protects your lines of credit with your bank for the times you need it most.  There are many other advantages that will be outlined in future blogs.

Equipment Leasing Preserves Cash

Business people are lulled into thinking that paying cash is a good way to acquire equipment because doing so avoids finance charges and interest expense and results in lower total cash outlay. In fact, paying cash can be the most expensive way to solve the problem.

There are two main reasons for this:

(1) Liquidity Is Critical
You must have reserves. This can become an outright survival issue when slow paying customers, slow sales or unexpected expenses put pressure on cash reserves. On payday, your employees do not want to know how many people owe you money.

(2) Alternative Uses Of Funds
If all you are going to do with the cash you conserve by leasing is to put in the bank at 3% or so, there wouldn’t be much benefit. BUT, there are so many other ways you can deploy your cash that offer huge potential returns.

Here are ten things you can do with cash which you probably can’t do any other way:

1. Build a cash reserve in case customers pay slowly.
2. Book that big order and be able to pay for the raw materials to produce it.
3. Take quantity buying opportunities.
4. Get a bargain at an auction.
5. Take cash discounts (2% each 10 days is a 72% return)
6. Fund R & D projects.
7. Fund new marketing programs.
8. Hire your competitor’s top salesperson.
9. Buy your competitor.
10. Invest in appreciating assets such as real estate.

To learn more about equipment financing and leasing, consult an equipment leasing specialist.

Equipment Leasing Offers Multiple Payment Options

Lease payments can be matched to project revenues; seasonal cash flow variations; budget limitations and other challenges. The need to divert cash, or add to loan balances is removed. Our leases can be structured with no payments for up to six months, longer amortizations, and PUTs, TRACs or other optional alternatives to lower payments even further.

equipment leasing

Equipment Leasing is Quick and Easy

Equipment leases feature simplified documentation, easy one page applications, no financial statements in most cases, accelerated approval times and more. All designed to get you the equipment you need without delay.

A typical lease finances as much as 110% of the equipment cost because it usually picks up delivery, installation and other soft costs. It only requires one month’s rent in advance; there is a UCC filing only against the specific equipment leased; and the leasing company won’t bother you for the next five years as long as you make your payments. At the end of that time, they will sell you the equipment for its then current fair market value (probably minimal); and you will have expensed the payments directly for tax purposes.

Furthermore, lease payments vary to match your cash flow curves. If you are in a seasonal business, that can be a crucial benefit to leasing. Equipment leasing matches the payments to the logical period of time that you will be using that equipment before it is necessary to upgrade; and will allow you to upgrade without penalty. These are just some of the “custom” features available in our leases that usually aren’t in a bank lending agreement, and they affect your net cost. So, when considering financing, look beyond rate alone to the underlying considerations. You may find that, sometimes, “it costs less to pay more.”

Use of Equipment – not Ownership – Generates Profits

In deciding how to pay for an equipment acquisition, it is important to remember that …

It Is The Use, Not The Ownership, Of Equipment That Generates Profits

Before seeking out a bank for a loan to buy equipment, consider that there is a difference between ownership of equipment and use of equipment from the perspective of profit generation. The only time that ownership of an asset earns profit is when that asset appreciates in value – like real estate, patent rights; precious metals or collectibles. If it is an appreciating asset, it makes sense to own it. If it is not an appreciating asset, it is logical to gain the use of it for the time that you are going to need it. Leasing facilitates this goal. Another factor mitigating against ownership is that new technology is obsolescing everything that was “new technology” before, and that is something that is going to continue to happen in the future… only faster. So, given that most equipment is going to be worth very little very soon, ownership becomes even less desirable.