Performance & Hotrod Business February '14

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right at fair market value at the end of the lease term. The other option, he says, comes with a slightly higher monthly payment, but at the end of that lease term, the leasing company sends an invoice for $1, which upon being paid transfers ownership of the capital equipment to the lessee who then owns it outright. With options come choices and decisions, and each business has unique needs. For a business owner, says Perlstein, it's vitally important that they discuss such decisions with their accountant to ensure that they're choosing the options that are right for their particular business model and situation. "There are tax implications and benefits to each option, and what is best varies by business," he says. As in any situation where a company is seeking financing, lease terms are dictated There are tax implications and benefits to the various financing options, so shops should choose wisely. (Photo courtesy Jet Edge) largely by an internal credit application that the equipment manufacturer submits to a partner leasing company. Through that process, established businesses with a strong credit history logically receive more attractive rates and terms. New businesses that have less established credit histories still have options, though they may be at less desirable terms. For example, younger companies may be asked to place a larger down payment that includes the first and last two months' deposit, says Perlstein. "It's important that businesses know they can negotiate the terms of their lease, including the length of the lease and amount of down payment, which affects the monthly payments and can also have tax implications, as well," he adds. In the end, alternatives to a cash purchase of high-dollar shop equipment— whether a lease or manufacturer financing—can be right for different businesses at different times. What remains constant, however, is that the decision can make a big impact on a shop's bottom line. All shops should consult their relevant professional financial advisers… and then choose wisely. IMPORTANT NEWS! New regulatory requirements are coming soon...the best FREE EMV-ready device is already here. PROCESS CREDIT CARDS WITH YOUR SMARTPHONE FREE EMV-READY TERMINAL FREE WIRELESS TERMINAL ® WHOLESALE RATES .05 INTERCHANGE % RATES AS LOW AS % * • FREE Placement, Credit Card Terminal Wireless/Land Line / High Speed / Dial-Up • Easy Setup - Quick Approval • Integrate with your current POS • Free Paper** • No set-up fee • Check Services Available • Early Termination Fee with your current processor? NAB will reimburse your business up to $295** ENROLL NOW - CALL A SPECIALIST TODAY! 866-481-4604 ©2014 North American Bancard - All Rights Reserved. North American Bancard, LLC is a registered ISO of Wells Fargo Bank, N.A., Walnut Creek, CA. American Express may require separate approval. * Durbin regulated Check Card percentage rate. A per transaction fee will also apply. **Some restrictions apply. February 2014 PHBFEB.indd 81 n Performance & Hotrod Business n 81 1/3/14 12:17 PM

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