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The Asset-Buy Sell Plan

A New Approach To Finance Working Capital

The Asset-Buy Sell Plan is a unique sale leaseback arrangement that has been created for the specific purpose of supplying working capital for the small business sector. It is designed to let small business owners turn fixed assets into working capital. This gives the owner an opportunity to restructure his financial obligations from short-term liabilities to long-term lease obligations that meet his cash-flow potential and will free up his existing lines of credit.

The Advantages of a Sale-Leaseback

1. A Sale Leaseback arrangement can provide a reliable source for working capital.
2. When the interest rate on your equipment (asset) is higher than the current interest rates available, you may be able to save money by refinancing at lower effective rates.
3. It is possible under such an arrangement to obtain an advance equal to or larger than what could be obtained from conventional sources.
4. A business owner may deduct all lease payments from his otherwise taxable business income.
5. The company has the option to purchase the equipment at the then fair market value.
6. Lease obligations are generally indicated in footnotes to the balance sheet so that vital financial ratios usually scrutinized by prospective lenders and reporting agencies are not affected by this increase in debt financing. Thus with the sale-leaseback arrangement, a company's financial ratios are unaffected and therefore its existing credit lines are left available for short-term needs.
7. The arrangement permits a company to borrow 100% on its own equipment (asset) instead of 35-65% from conventional loan sources.

The Structure of The Asset-Buy Sell Plan

The Asset-Buy Sell Plan is structured in such a way that each piece of equipment offered by the company for sale would be appraised independently with a lease documentation prepared for it. This allows the investing company the flexibility to lease back a portion of the equipment or any combination up to the total package. It also provides the firm the flexibility of terminating any individual lease should that item become obsolete or inadequate to perform the function that is expected of it to keep the productivity schedule of the firm at its desired level.

The plan has been structured flexibly so that a firm accepted into the plan can add or delete leases as operating conditions demand. An early cancellation may carry some penalty, but not as large as penalties in tax based lease on new equipment through conventional leasing sources.

Unlike regular sale-leaseback programs, the Asset-Buy Sell Plan has been specifically designed to allow small business owners to acquire working capital without going to the bank. The plan is similar to other sale-leasebacks in terms of mechanics and the benefits achieved by the arrangement, but different in certain vital areas. For example, with the Asset-Buy Sell Plan, leases can be scheduled in accordance to the cash flow and income periods of the small business to facilitate timely loan or lease payments. Lease terms can be as high as 10 years. These are generally not available in many sale-leaseback arrangements. Also, there are no application fees or closing costs. Interest rates are very competitive and applications are accepted nationwide.

Virtually all equipment with long economic life is considered. This includes printing equipment, store fixtures, office equipment, computers, optical equipment, cash registers, medical equipment, satellite dishes, telephone equipment, manufacturing equipment, store fixtures, construction equipment, automotive equipment, office furniture, x-ray equipment and dental equipment. Any kind of office equipment is considered. Financing requests of $15,000 or more is preferred, but less then $15,000 is also considered.

A firm can borrow as much as 100% of the current value of equipment accepted into the program. Terms are flexible, generally up to 72 months. Requests up to $100,000 are analyzed and credit decisions made within 24 hours. Requests of more than $100,000 take 48 hours. Another valuable advantage of the Asset-Buy Sell Plan is the availability of a pre-approval program giving instant credit for future leasing needs once a firm is admitted into the plan.

Maximize your Cash Flow without Going to The Bank

With the reluctance of many lenders to extend long-term fixed repayment schedules, we believe our Small Business Finance program will help fill a gap in today's market.

The Business Finance program will benefit the small business owner in many ways, but the basic structure of the program is to give the owner the tools to help restructure short-term liabilities into long-term liability that meets with his cash-flow capabilities.

The conversion of equity in equipment into cash via our Business Finance program can give you the means to meet your financial obligations in today's economy, and lock in a lease payment schedule that will not change but will remain constant from year to year.

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