Micro-Ticket Leasing as a valuable financing alternative for companies

For companies that deal with equipment, micro-ticket leasing can provide significant business benefits. Because it reduces the demand on a business’s cash flow, you don’t need to invest in high-tech equipment that can quickly become outdated. In addition, it leaves your bank credit options open. This is why leasing is one of the fastest growing equipment financing methods on the market today. So it’s no surprise that around 80% of all US businesses lease a portion of their equipment. Leasing is an option not only for small family businesses; even Fortune 500 companies use it.

With micro-ticket leasing, a business is not required to pay upfront for the equipment it leases. This keeps the company’s working capital free for other business uses, such as maintaining critical inventory levels. The waiting time for the required equipment is almost zero, as the required processing time is very low. Additionally, any new or fairly new business, with little to no credit or business history, may be eligible for a lease micro-ticket. Even for businesses that have exhausted their business line of credit with banks, micro-ticket leasing can provide an avenue to continue business.

So how does micro-ticket leasing actually work? This lease is available for any hardware or equipment costing between $1,000 and $10,000. If the total sale is less than $100,000, the buyer may not need to provide any financial information when submitting the application. Unlike standard bank loans, buyers with a business history of less than two years are easily approved. Approval is usually obtained within a business day or two, and the buyer receives a term sheet that can be reviewed and then accepted or rejected. The main benefit is that micro-ticket leasing companies can say yes, even when banks might have refused the transaction.

What does the customer get from micro-ticket leasing? The total amount the customer has to pay for the equipment can be less than with conventional leasing and the monthly rental payments will be quite manageable for any company. Typically, conventional financing may require a down payment of at least 20%. A micro-ticket leasing company may only require payment for the first month in advance. Since a bank line of credit is not related to the lease of microtickets, the lease payments have no effect on that facility. The client’s borrowing power with their bank is not affected and can be used for other business opportunities. Also, as the customer makes the lease payments, their credit rating improves. Upgrading equipment becomes simpler as it ages. Old equipment can be easily upgraded to newer versions. Additionally, lease payments can be charged for income tax purposes and this can improve a business’s after-tax cash flow. Lease payments are typically made in equal monthly installments, which protects against market fluctuations in interest rates.

Most new businesses face limited cash flow issues but still need teams to run the operation. With micro-ticket leasing, these businesses can purchase new equipment, without the large capital investment, resulting in significant cash flow advantages. The increases in sales and profitability that could be anticipated from point of sale or other customer improvement equipment may well exceed the cost of leasing the equipment as well.