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California First National Bank is an internet-only bank with no branches.

California First National Bank is an internet-only bank with no branches.

California First National Bank is an internet-only bank with no branches.


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Benefits of Leasing

Why should I lease instead of buying the equipment?

Leasing is flexible. A lease provides the use of equipment for specific periods of time at a fixed rental payment and allows you to be more flexible in managing your equipment.

Leasing is cost effective. Equipment may be expensive and some costs can be unexpected. When you lease, the risk of having to operate with potentially obsolete equipment is lower because you can upgrade or add property to meet your changing needs.

Leasing allows you to stay on the cutting edge of technology. Business managers have learned that the primary benefits of higher productivity and profit come from using property, without owning it.

Leasing helps conserve your operating capital. Leasing keeps your other lines of credit open, helping to better manage your balance sheet. You don't tie up cash in property and you can avoid costly down payments.

Avoid technological obsolescence. Especially within the dynamic technology and communications department where new products emerge at lightning speed, leasing rather than buying capital assets can keep you up to date. By making the replacement process a breeze, you won't miss a step while keeping your company and your staff technologically savvy.

Leasing also helps businesses make the right capital allocation choices by removing the pressures of cost from the decision-making process. When there's no room in the capital budget to buy an asset with cash, lease payments from the operating budget are an attractive alternative.

Top Benefits of Leasing

Little (Or No) Down Payment 
With leasing, your initial cash outlay is generally limited to a deposit of one to three months of normal lease payments. Other financing sources often require a down payment of 10 or 20 percent. Leasing is an excellent choice for avoiding a large initial cash outlay.

Reduced Monthly Payments 
Lease payments are lower than loan payments, because with leasing you pay only for how long you use the property.

Better Cash Management 
Payments are determined at a fixed amount, payable monthly, quarterly, semi-annually or annually. Once established, they remain at that amount, no matter what.

Planned Replacement and Upgrade Schedules 
A lease-financing package allows you to replace or upgrade property prior to the end of a lease. You're assured of having the most up-to-date property, which leads to higher operating efficiencies and added capacity for your operations.

Lower Maintenance, High Efficiency
By replacing and upgrading property on a regular basis, you reduce repair and maintenance costs. Productivity rises through better integration of new property, and you'll have less down time with property that operates more efficiently.

Flexible Payment Options 
These options include scheduling payments at different intervals, on a step-up or step-down basis, matched with cash flow from earnings generated by the leased property, or around swap leases.

Additional Credit Source
Leasing provides the chance to save cash and supplement existing bank relationships with an additional source of credit. If a school is unwilling or unable to pursue a bank loan, leasing is an ideal alternative. With leasing only the equipment is lined, unlike most bank loans + lines of credit where all assets of the school could be subject to lien. Leasing also provides schools with more flexibility, because with lease financing they're not subject to compensating balances or restrictive covenants often associated with bank loans.

Convenience, Speed and Flexibility 
CalFirst initially provides a master lease agreement spelling out the basic terms and conditions. We can then quickly and easily add schedules with minimal additional paperwork and streamlined approval procedures as your needs evolve for additional property and financing. With CalFirst, you select the property you want from the vendor of your choice, and we'll do the rest.

Off Balance Sheet Financing 
Operating leases do not appear on the balance sheet, but rather show up as an operating expense on the income statement. These assets do not appear on the balance sheet, which can improve financial ratios such as lower the debt to equity ratio, raise the current ratio (liquidity), and increase return on assets. Improved ratios may help an organization obtain additional traditional financing, providing more capital for growth and profit-generating activities.