Equipment Leasing: Debunking Myths and Unlocking Year-End Opportunities for Community Banks
As we approach year-end, many businesses are looking to acquire equipment to take advantage of depreciation allowances. For community bankers, understanding the nuances of equipment finance and leasing is critical to advising clients effectively. Let’s clear up a few misconceptions:
Myth #1: Leasing Means You Don’t Own the Equipment
Not true. Under an equipment finance lease, clients can have ownership rights while making structured payments. This is especially important for businesses purchasing equipment in the fourth quarter to maximize tax benefits. Our leasing program allows clients to depreciate equipment and claim eligible deductions—all without a large upfront cash outlay.
Myth #2: A Lease Is Just Another Loan
While both leases and loans help businesses acquire equipment, they differ in structure and accounting treatment. A finance lease is a contractual payment obligation, not a loan. Here’s what sets it apart:
- 100% Financing – No down payment required; costs like shipping, installation, and warranties can be included.
- Cash Flow Alignment – Payments can be structured to match revenue cycles.
- Ownership Benefits – Clients maintain responsibility for maintenance, taxes, and insurance, and can depreciate the asset.
- Collateralized by Equipment – The equipment itself secures the lease.
- Long-Term Structure – Typically spans most of the equipment’s useful life.
Unlike a loan, lease payments do not separate principal and interest—they’re simply periodic payments toward the equipment.
Our Community Bank Leasing Advantage
BB Community Leasing offers a program designed specifically for community banks and their customers. Here’s what makes us different:
- No Early Termination Fees – Clients can pay off early without penalty.
- Ownership & Tax Benefits – Clients retain ownership and can leverage depreciation allowances.
- True Tax Lease Options Available – Just let us know if that’s preferred.
- Fast, Simple Process – Application and invoice only for transactions up to $150,000; same-day approval and closing. Larger amounts processed quickly after credit review.
- Competitive Rates – Backed by community bank-based lending in our six-state market.
Our goal is simple: help businesses secure the equipment they need with minimal upfront expense, allowing them to pay for it through the revenue it generates.
Bottom Line: Equipment finance leasing is not a compromise—it’s a strategic tool for businesses and a growth opportunity for community banks. By understanding the facts, you can confidently guide your clients toward solutions that strengthen their operations and your banking relationship.