LEASING	BANK FINANCING
Interest Rates	Fixed Rate / Fixed Payments	Usually an adjustable rate
Term	Up to 5 years on all equipment over $2,500	Usually 2-3 yr.
Down Payment	100% Financing	Typically 20% - 30% of total cost
Financial Statement	Not mandatory for transactions up to $150,000, used for customers wishing to submit financial, and financial are not required annually after approval	Required on almost all transactions over $10,000, and bank usually requires annual updates to maintain loan
Financial Reporting	Not required to be reflected on balance sheet as debt	Carried on balance sheet as debt
Sales Tax	Financed with monthly payment	Must be paid in advance
Hidden Requirements	None- UCC filling & processing fee only at lease execution, no lease termination costs	Compensating balances, other bank charges, loan covenants
Tax Benefits	Usually 100% deductible over the term of the lease	Depreciated over the IRS's useful life of the equipment
Effective Cost	Lower than bank financing due to tax benefits, lower down payment, longer lease term and no requirement for compensating balances	Higher cost due to longer depreciation schedule, larger down payment, adjustable interest rate, and other hidden charges
Opportunity Cost	Frees bank lines and cash allowing you to invest further in your business	Ties up bank lines possibly preventing opportunities to expand your business