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DEFINITIONS &
ASSUMPTIONS
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Updated Jan 22, 2021
PFC
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Soft Costs
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You may include up to
20% of the equipment price in "Soft Costs". Training, Shipping,
Warranty, Installation and other fees to setup the equipment and have it
start making money can be included in the the price payment. There is a $500
one-time lease documentation fee.
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Lease Type
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Assumes an Operating
Lease @ FMV: Equipment stays on Lessor's balance sheet, Lessee expenses rent
payments. Lease could be an Operating or Capital Lease with end of lease
buyout options of $1, 10%, or FMV.
CONSULT YOUR TAX ADVISOR ON HOW LEASE STRUCTURE WILL AFFECT YOU.
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Credit Worthiness Affects Payment
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The estimates in this
calculator are non-binding and provide
a payment range from excellent to difficult credit worthiness. In equipment
leasing, excellent credit typically means great credit scores and > 7 Yrs
in business, Difficult to poor credit, or other past credit circumstances or
< 2 yrs in business, can make financing more difficult and you have not
financed comparable debt amounts in the past. Good credit typically means
> 2 Yrs in business and good to great personal credit scores. Depending on
your credit situation, the lease may require any of the following: higher
rates, larger deposit, other collateral, a shorter term, or a co-signer. This
lease estimator is just that, an estimate.
Each borrower is unique and final pricing and terms vary
accordingly. An equipment cost higher
than $200,000 requires a custom rate quote from Sky Allies Capital.
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Tax Depreciation
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This equipment
leasing calculator assumes a blended federal tax and state tax rate of 25%
and 5 year straight line depreciation, as opposed to accelerated
depreciation. Essentially, we
calculate the depreciation assuming that the equipment loses value at an even
rate during its life. For example, if
the equipment has an expected life of 5 years, we assume that it loses 20% of
its value each year. In reality, depreciation doesn’t happen in a straight
line; it usually occurs at an accelerated pace in the early years of the
equipment’s life. Thus, the equipment may actually lose 50% or 60% of its
book value by year-2 even if the equipment has a 5-year life. The value of
the equipment on the books does not necessarily reflect its Fair Market
Value.
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