Performance & Hotrod Business February '14

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The utilization of alternative financing can make solid business sense. (Courtesy C&S Performance) "Additionally, leasing equipment through a company like ours essentially transfers the risk of owning that equipment away from the business owner and onto us," he adds, noting that if more advanced technology hits the market during the lease period, a business owner can simply opt not to renew the lease and upgrade to the latest equipment. The older technology then becomes the leasing company's challenge to deal with. Bayless notes that most equipment lease terms range from 24-48 months. Like with traditional loans or financial instruments, interest rates fluctuate along with credit markets and according to the leasing company's internal credit scoring model. At the end of a lease term, a shop can purchase the equipment outright for agreed fair market value, renew or extend the lease, or simply return the product and upgrade if more advanced technology has indeed hit the market. In addition to that flexibility, he says, there are also cost benefits to leasing over purchasing. "If you're purchasing equipment like this with a traditional bank loan, you've got a complete amortization of the value of the equipment over the course of the loan," he says. "You're paying for the entire value of the equipment. "In leasing from an organization like ours, we take a residual position in the equipment, meaning that we (Courtesy Mo' Muscle Cars) February 2014 PHBFEB.indd 79 n Performance & Hotrod Business n 79 1/3/14 12:16 PM

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