Business owners like you are not always aware of the options available to them for financing new, or used, equipment.  Should I get a  bank loan or talk to someone about a lease?  Should I pay cash?  Banks are probably a business owner’s greatest resource.  However, sometimes situations arise where banks cannot satisfy customers’ requests for additional capital.  We work with several bankers to help them with their customers’ financing needs.  We then evaluate these customers’ situation and determine which lease option is appropriate for their business.  So now the question becomes do I finance my equipment purchase with an operating lease or a capital lease?  The answer depends on how you want to manage cash flow.  Think of an operating lease as a rental agreement.  You as a business owner don’t own the equipment and can expense your lease payments.  This allows you to lower your overall tax burden and keep the equipment off your balance sheet — a.k.a. “off balance sheet financing.”  A capital lease on the other hand can be thought of as a 100% finance agreement.  You cannot expense the lease payments, but you can put the new equipment into your asset base and depreciate the asset to lower your tax burden.  You can also take advantage of IRS Section 179 deductions with a capital lease.  Either lease can help you get access to the resources you need to operate more efficiently and not impact your bank lines of credit.