Financing Options—Leasing and Purchasing
Financing options can be confusing, but at Power Motive Corporation, we try and offer simple, straight-forward solutions that address our customer's most pressing issues. If you are asking yourself, "How much will it cost?" and "What's the monthly payment?", you are not alone. We've created this page so we can help address your basic questions. Our trained financial specialists are always available to take your call at 303-355-5900. Each customer has a different need, a different perspective, and different expectations during the equipment acquisition process. At Power Motive Corporation we strive to be flexible and find the solution that works best for you. Finding the right machine may be important, but it may be equally important to find a flexible solution to finance this purchase.
Unlike most heavy equipment dealers, Power Motive Corporation offers a wide range of financing and lease programs for all new and used for all makes and models.
For questions regarding financing or leasing of equipment please contact:
Tony Suits | Retail Finance Manager
There are several ways in which a machine may be acquired. Below is an overview and explanation of terms and conditions that may affect your buying decision. Leasing provides our customer the use of equipment for a specified period of time with a possible option to buy at the end of the lease term. From an accounting standpoint, there are two types of leases:
- A capital lease
- An operating lease
A capital lease meets one or more of the four criteria of the Financial Accounting Standards Board (FASB) No.13:
- A capital lease can have a purchase option price that can range from $1.00 to an amount below expected fair market value.
- A lease in which 90% of the cost of the equipment would also qualify as a capital lease, regardless of the purchase option.
- A capital lease is a finance lease, which means that for the customer it represents nominal ownership. The cost of the equipment and the lease obligation must appear on the customer's balance sheet.
- Taxes are also paid monthly on each lease payment.
An operating lease must not meet any of the criteria of the above-mentioned FASB 13. An operating lease is structured so that the customer can use the machine for the term of the lease with an option to:
- Return the equipment
- Purchase machine at its fair market value
- Finance the balance
An operating lease is basically a long-term rental in which the customer can use the machine without the risks or benefits of ownership. For accounting purposes these types of leases are usually treated as 'off balance' sheet.
A Conditional Sales Contract is the more traditional form of acquisition of equipment. Typically this medium is based on the upfront payment of taxes, a down payment and subsequent payments over a fixed period of time. Often times skip payments, accelerated payments, balloon payments, quarterly, semi-annual, and annual payments in addition to trade-ins would be handled through a conditional sales contract.
A Conditional Sales Contract builds equity faster and normally will be the low cost means of acquiring equipment over the full term of the contract as compared to a lease.
As a part of, or an addendum to, any lease or conditional sales contract, there may be the need to acquire a Repair and Maintenance Agreement. While this may not affect the classification of a lease for accounting purposes, it may have a positive impact on a higher residual value of the equipment. If a Total Maintenance and Repair Agreement fits your needs, please ask our financial representative to discuss and quote an Agreement that fits your needs.
A UCC (Uniform Commercial Code) will be required for any Lease and or Conditional Sales Contract. The UCC is the "law of the land" for obtaining a first priority lien position on equipment that is taken as security under either financing agreement.
We look forward to serving your equipment and financial needs.
Please call us at 303-355-5900 with any of your financial needs.