Equipment Financing and Sale Leasebacks

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1 Equipment Financing and Sale Leasebacks Our submissions are normally approved within 24 hours or less, then doc'd and funded within days total work time. The most important part of the process is having all the necessary paperwork before we start. To work these deals out we need the following: 1. Application 2. A credit release signed 3. An equipment list worksheet complete If you feel your client is going to be going for more than $50, then in addition to the above we would also need the following (and this will vary deal to deal): 1. Last two yrs tax returns 2. A year to date financial. Their last four months bank statements (just the summary page) because often times the bank will slow down the process by making it difficult to get the bank rating so with the bank statements this normally eliminates this problem. If it is a Sale Leaseback our sources will or will not require a UCC search (they do this) and an onsite inspection. All of this is compressed into the above mentioned time frame. Best Regards, Lester Bennett

2 Advantages of Equipment Leasing Leasing equipment has specific advantages over other types of financing or purchasing with cash. These four areas will help you understand the benefits of equipment leasing. Cash Management NO Down Payments If a small company wants to borrow money from a bank, a down payment is required and can range from 10 to 20%. With and equipment lease, there is no down payment and typically one or two payments are collected up front. This ranges from 2-6% of the equipment cost (Not all cases, depends on financial institution) Lower Monthly Payments Equipment leasing, in most instances, provides lower payments than with a bank loan. Financing is tailored to your payments to your financing and leasing needs and can be adjusted by lengthening or shortening the term of the lease. Up-Front Costs When acquiring equipment other incidental costs such as sales tax and installation charges can be put into the lease financing. If the equipment is purchased with cash these costs need to be paid up front and can be significant. Improved Cash Forecasting The term and payment of the equipment lease are fixed once the lease is done. You know exactly what your payment will be every month and can better forecast your cash flow. Technology Change Ability to Update Equipment If you choose a residual-based or fair-market value lease, lease financing transfers some of the risk of obsolescence to the leasing company. This happens in two ways. First, you pick a term duration that offers you comfort. If you think the equipment will be obsolete in two years you pick a 24 month term. Second, at the end of equipment leases you are able to choose to 1) return the equipment, 2) renew the lease, or 3) purchase the equipment. With commercial equipment leasing and financing you have the flexibility to make your choice at the end of the lease term. When you purchase equipment via a bank loan or cash, you own the equipment at the end of the term. This gives you no flexibility. If you choose to return the equipment, the leasing company then assumes the ownership, leaving you free to obtain up-to-date equipment. Tax Benefits Deductibility of Lease Payments In most cases, the full amount of each lease payment is deductible for tax purposes. (Consult your tax advisor to make sure the type of equipment lease you are entering into allows for a tax benefit) In some cases, this deduction from an equipment lease is higher and may have more advantages than the depreciation benefits of ownership. Flexibility and Convenience

3 Timing Equipment Leasing and financing offer less red tape than with bank financing. You can also complete the process quicker which is important if you need your equipment by a specific date. Some lenders can for free or charge, give you a lease manager who will coordinate the details with your equipment vendor to make sure your lease is completed in the timeframe needed. Flexible Payment Options To meet your company s financing and leasing needs, Most lenders will work with you to create a payment plan that best fits your operational requirements. Working through the term and payment options will help create the best lease for your company. Avoids Disposal Problems At the end of your equipment lease you can return the equipment. If you use a bank loan or purchase equipment with cash you are burdened with selling the used equipment yourself if you no longer need it or if it is out-of-date. What Equipment Can Be Leased? Your business can acquire just about any type of equipment through Business Equipment Financing: Audio/Visual equipment Agricultural equipment Commercial Vehicles (learn more) Computer equipment and software Construction equipment Forklifts and materials handling equipment Industrial equipment Laundry equipment Machine tool equipment Manufacturing equipment Medical equipment Office furniture and equipment (copiers, fax machines, etc.) Photo processing equipment Point-of-sale systems Printing presses and related equipment Restaurant equipment Telephone systems Tractors and trailers What Are the Advantages of Leasing? Business Equipment Financing offers your business: Less impact on cash flow. You can structure payments to parallel your cash flows. Leasing can be great for seasonal or cyclical businesses that prefer to schedule payments during peak cash flow periods. Reduced paperwork and approval time. Most lease credit decisions can be made within three business hours. Transactions up to $100,000 require completion of only a simple, one-page application. Conservation of capital and credit. Your lines of credit and sources of capital aren't tied up in equipment. Instead, they're available for opportunities such as inventory, marketing, or personnel. Immediate use of equipment. After signing your lease documents, you can contact the vendor to schedule delivery. It's that easy. Project basis use of equipment. By selecting a lease term that closely matches the project's duration, leasing is a good way to acquire the latest equipment without having to keep it when that project is complete. Then, enter another lease on new equipment for the next project. This way you'll always be able to maintain a competitive edge by using the most advanced

4 equipment to serve your clients. 100% financing - including soft costs. In addition to financing 100% of the equipment, you can include "soft" costs (up to 10% of the equipment cost) such as sales tax, shipping, software, training, maintenance and installation into the lease. Protection against obsolescence. High tech equipment is often obsolete in two-to-four years. You can add upgrades and new equipment by modifying your lease arrangement to keep your company on the leading edge. Plus, if you want to acquire complementary equipment (e.g., adding voice mail to a phone system), you can arrange for both equipment leases to end at the same time. This can prevent staggered leases from making your equipment a confusing combination of new and old. (Subject to credit approval) Tax benefits. For certain leases, you can deduct monthly lease payments as an operating expense. Moreover, leasing may help your business avoid the Alternative Minimum Tax (AMT). Improved balance sheet ratios. Unlike the traditional methods of financing, operating lease obligations generally are not capitalized, improving balance sheet ratios. Options for purchase or renewal. At the end of the lease you may choose to purchase your equipment, upgrade it, or continue to lease it. Or, if you're done with the equipment, return it. Reduced interest rate risk. By locking in fixed payments now, you can avoid the risk of inflation in the future. What Lease Options Are Available? There are other options available as well. Features End of term options $1 Buyout Option Purchase for $1 10% Purchase Option Purchase at a percent of original price, renew lease,* or return equipment Fair Market Value Option Purchase at Fair Market Value, renew lease,* or return equipment Can be structured to fit Yes Yes Yes Yes cash flow Equipment obsolescence No Yes Yes Yes protection Inclusion of "soft costs" Yes Yes Yes Yes Relative Cost of payments Low Lower Lowest Lower Tax advantages of Yes TBD by Equipment Type No Yes ownership available to lessee Allows upgrading/tradeups Yes Yes Yes Yes Down payment required No No No No Capitalized on balance Yes TBD by Equipment Type No Yes sheet, generally Allows Co-Terminous Addenda (CTA) Yes Yes Yes Yes Available terms* 12 to 60 months 12 to 60 months 12 to 60 months 10% Purchase Upon Termination Option Purchase at 10% of original price, upgrade or renew equipment 12 to 60 months

5 Types of Businesses Automotive Tools Backhoes -Business Vehicles - Car Wash Equipment -Carpet Cleaning Equipment Cash Registers Compressors - Computer Equipment - Construction Equipment - Cranes and Shovels Delivery Vans - Dump Trucks Engravers Excavators - Farm Equipment - Fitness/Gym Equipment Flat Bed Trailers Forklifts - Garbage Trucks - Lawn Mowers - Machine Tools - Manufacturing Equipment Material Handling Equipment - Office Furniture - Pickup Trucks - Point of Sale Equipment Printing Presses - Restaurant Equipment - Security Cameras - Semi Trucks Software - Storage Tanks Telecommunication Systems - Tire Balancers Tractors - X-Ray Equipment Trailers Computers Storage racks Display cases- Restaurant ovens, Counters, Refrigerators, ice makers, Bar equipment The list could go on and on.. Equipment Finance, offers a wide variety of lease options. Contact us for the lease option that best fits your business. Lease transactions Equipment finance transactions Conditional sales contracts $1 purchase options Fixed-price purchase options Fair market value options Step payment structures Variable payment structures Seasonal payment structures Progress payments Application only Private label

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8 GAIN Financial Services Equipment Finance Application Applicant Information (Print to hand write) Lessee: Last First M.I. Date: Company: Address: Street Address Suite/Unit # City State ZIP Code ( ) Fax: ( ) Nature of Business: Type of Business Corporation _ Partnership _ Sole Proprietor _ Years in Business Tax Exempt Yes No PRINCIPALS Full Name: Social Security # : %Ownership: Title: ( ) Home Address: Full Name: Social Security # : %Ownership: Title: ( ) Home Address: Bank Name: Account Number: BANK INFORMATION

9 TRADE REFERENCE 1 TRADE REFERENCE 2 VENDORS/SUPPLIERS OF EQUIPMENT VENDOR: Account Number: Description: VENDOR: Account Number: Equipment Price: Total Equipment Cost: Total Build Out Cost: (Please fill out attached equipment inventory Form) Is the equipment New Used Estimated Delivery date: 30 Days 60 Days 90 Days Over 90 Days Structure Request Term: 24 Months 36 Months 48 Months 60 Months Disclaimer and Signature I / We certify that the information provide on this application is true and complete to the best of my/our knowledge. I/we understand that false or misleading information on this application can result in denial of financing request. This application is brokered through Gain Financial Services located at Norwalk Blvd #6 Lakewood, Ca Signature: Date: Signature: Date: Please fax complete application to (562) or to [email protected]