Does Your Business Need to a Lease New Or Used Grain Bins?
Grain Bin Leasing is available from a number of different lease financing sources for both capital and operating leases.
What’s interesting about grain bins that can make them ideal for an operating lease is the fact that you can expense or write off the acquisition costs faster as an operating expense versus claiming depreciation and interest costs.
With most equipment, the write off rate is high enough that there tends to not be a lot of difference between a loan versus operating lease option or a capital lease versus operating lease option.
But because grain bins are a structure by accounting and taxation definitions, the depreciation rate is much lower due to their longer term useful life. And even though a grain bin is not technically a piece of equipment, leasing companies like these types of assets, especially hopper bins or anything that is set up or designed for easy relocation.
So, if you are looking for additional expenses for your up coming year end, an Ag operating lease can afford you the ability for a faster write off of the grain bin acquisition cost and save you tax dollars in the process, provided that any lease you commit to would qualify as an operating lease according to the applicable taxation and accounting rules. Make sure you check with your accountant or tax adviser before signing up for anything to make sure the lease offer will properly qualify as an operating lease.
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If you don’t need the accelerated write off, then either a capital or operating lease can do the job for equipment lease financing grain bins. A capital lease may have a slightly higher interest rate, but the overall tax paid will probably be lower due to the absence of a balloon payment at the end of the lease term.
Used grain bins can also be lease financed and although the rates and terms may not be quite as good as for new equipment, this can still be an excellent financing option.
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