Commercial Leasing
What is a Commercial Lease?
Generally, a lease is an exclusive right to use golf carts or utility vehicles for a specified time period, usually 24, 36 or 48 months. The customer does not have ownership rights until a purchase option, if any, is exercised. In a lease the customer finances the purchase price less the present value residual set by the financing company. Typically, personal property tax is paid by the financing company and the customer is billed for the cost. The customer must provide physical damage and proof of liability insurance coverage to financing company.
SportsTran uses third party financing companies to complete lease transactions. Leases are limited solely to legal entities such as corporations or organizations, and are not available for individual customers. Rates are subject to change and all financing is subject to credit approval.
Benefits of a Commercial Lease:
Improved Cash Flow By incorporating residuals into a lease, lower monthly payments result.
Repayment Terms to Match Seasonal Revenue Streams Repayment terms can be tailored to match the lessee's seasonal revenue. Skip or reduced payments can be incorporated into the lease stream to reflect non-revenue periods.
Protection Against Inflation By paying for today's usage of equipment with tomorrow's inflated dollar, leasing offers a hedge against price increases.
Economical Fixed Rate Financing The stream of fixed rate lease payments will not increase since the Lessor has guaranteed them for the lease term. The Lessee does not need to be concerned with fluctuations in the cost of money, since the Lessor assumes the risk of interest rate variations. This makes it easier to plan budgets.
Administration Leasing allows for the consolidation of many services into one transaction. Maintenance packages and insurance can be incorporated into the lease, requiring only one monthly payment from the Lessee.
Obsolescence Since the equipment is owned by the Lessor, the risk of obsolescence is transferred away from the Lessee. At the end of the lease customers have the option of turning the vehicles in and getting new vehicles under a new lease. This has a particular advantage when the lease term corresponds to the warranty expiration. Keeping vehicles under warranty during the customer's period of use greatly reduces service and repair costs.
New Source of Borrowed Funds Leasing offers the opportunity to establish important financial sources. By developing additional financing sources existing credit lines remain unused, allowing for the more productive use of these lines.
100% Financing Leasing allows the financing of the entire cost of an asset including freight, distributor set up and taxes.
