Take a look at what our Banclease program can do to increase your bottom line. As an example, let’s take a loan request for $50,000 at 7.5% with five annual payments and compare it to a lease for the same term.
1. First of all, you receive the first annual payment in advance – you don’t actually have $50,000 loaned out with the lease, you have $39,193.94 out ($50,000 minus first payment in advance of $10,806.06). If you gave no consideration to your depreciation benefit from owning the equipment, your yield would be 8.00%.
2. Your lease will cost the customer $400.00 LESS than the loan product. This does not take into consideration the greater benefit your customer may receive with this lease by expensing his rental payments as operating expenses in operating lease cases.
3. Your bottom line is increased 50 Basis Points with the lease. This is a pre-tax yield and does not take into account the depreciation your bank may take in an operating lease case, which can increase your yield (consult your attorney or tax advisor).
That’s how you market a lease versus a loan to your customer.