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Equipment Leasing Trusts

Equipment Leasing Trusts (Essential Business Equipment)

State investor suitability rules apply – not suitable for all investors.

Leasing offers businesses an alternative to purchasing hard assets vital to the operation of business, especially items that are extremely expensive, or those that become obsolete within a relatively short period of time. An Equipment Leasing Trust gives the investor an opportunity to invest in the operational equipment that a company may need to operate.

This type of program creates income from the lease payments, which is paid out to the investor as dividends.

Leasing gives a company greater flexibility by freeing up Capital because lease payments are less than purchase payments. A company leasing its operational equipment also has the tax advantages. Unlike bank loans, lease obligations don’t appear as debt on a company’s financial statements. This can be helpful as major debt can make a company less attractive to investors.

Additionally, because lease payments are typically less than purchase payments, this frees up capital to be dedicated elsewhere. At current corporate tax rates (2010 are 35%) leasing can be a financially attractive alternative to Corporate America.

Equipment Leasing programs offer an alternative that may not be directly correlated to the volatility of the stock market. They are typically illiquid investments which require a longer time commitment. Again, State or Federal Accreditation Standards may apply and may be speculative investments. Please discuss with an advisor prior to investing.

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