Financing
Illinois Material Handling offers a variety of specialty financing solutions to meet your business needs. Once the correct specifications of your equipment have been determined, how to finance that equipment must be decided. Very few acquisitions greater than $15,000 are cash sales. Instead, they are financed with some type of financial agreement. Existing lines of credit can be used. However, as an alternative, outside financing often is a better option, particularly if ownership of the equipment is not desired. The use of outside sources also preserves credit lines for other targeted capital expenditures.
Once the decision is made to finance your equipment, it is important to match the term of the finance agreement with the equipment’s economic life. If the term is too long, the equipment will reach a point where it should be taken out of service, however, there will still be obligations for additional payments, or a payoff to the leasing source for an early termination.
The primary decision is whether to own or not at the end of the term. There are certain features for each option:
Finance Lease (for the customer who wants immediate ownership of the equipment, but wants to pay for the equipment over an extended period of time):
- Tax benefits of depreciation deductions
- Conserves capital
- Conserves customer’s line(s) of credit
- Level payments for budgeting purposes
- May establish a predetermined “balloon” payment at lease-end
- Light usage of equipment
- Conditional sales contract
- Easier early pay-off
Operating Lease (for the customer who wants the lowest monthly payment and intends to return the equipment at lease-end):
- Lowest monthly payments
- Off balance sheet financing, not considered customer’s asset
- Ability to write-off entire payment for tax purposes
- Conserve cash and lines of credit
- Ability for the customer to write-off entire monthly payment
- Level payments for budgeting purposes
- Efficient use of equipment
- Lease structured to match the economic life of your specific application
- Capital appropriations not available
If equipment is required, but a commitment for either a finance lease or operating lease cannot be made, two alternatives are available. Delayed billing is designed to help a company through a fiscal budget term of a maximum of twelve months. One hundred percent of the payments are applied to reduce the established acquisition cost, less maintenance performed by Illinois Material Handling, and one percent (1.0%) interest on the remaining balance.
Delayed Billing (for the customer who wants to own the equipment but cannot allocate capital expenditures in the next 6-12 months):
- Customer certain of ownership but cannot allocate capital expenses at present
- Percentage of payments applies to purchase of equipment as opposed to short-term rental
- Customer commits to a purchase at the end of the delayed billing period
- Program structured to apply monies to permit purchase within a maximum of twelve months, a typical budget period
The second alternative and most flexible of all our options is our short-term rental fleet.
Short-Term Rental (for the customer who has short term needs):
- Need of equipment for a specific short term project, usually one year or less
- Possible change in equipment requirements in future
- Short-term seasonal need for equipment
- Capital appropriations not available (see delayed billing option)
