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Business Equipment Lease

Business leases can be the most misunderstood product on the market.  Leases are another lending function where a business obtains machinery or equipment with the end-goal of owning the item.  Iowa Savings Bank offers a lease program where the business owns the equipment at the end of the lease period, similar to a loan product, with a whole different tax write-off strategy.  See below for examples.

 

$250,000 Equipment Cost

Loan at 4%
$50,000 Down Payment
$44,925 1st year
$44,925 2nd year
$44,925 3rd year
$44,925 4th year
$44,925 5th year
$274,625 Total cost to own
Lease at 4%
$49,559 1st payment @ closing
$49,559 2nd
$49,559 3rd
$49,559 4th
$49,559 5th
$25,000 10% residual at end
$272,795 Total cost to own
($1,830) (Lease savings)

$100,000 Equipment Cost

Loan at 6%
$20,000 Down Payment
$18,992 1st year
$18,992 2nd year
$18,992 3rd year
$18,992 4th year
$18,992 5th year
$114,960 Total cost to own
Lease at 6%
$20,722 1st payment @ closing
$20,722 2nd
$20,722 3rd
$20,722 4th
$20,722 5th
$10,000 10% residual at end
$113,610 Total cost to own
($1,350) (Lease savings)

*Rates and Terms are subject to change. The above is for example purposes only.
 

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