Equipment, Software and Service Leasing
Windstream offers a variety of innovative, customer-focused leasing and financing solutions.
Equipment, software and service leasing through Windstream is part of our Equipment for Services (EFS) program. Windstream partners with banks and leasing companies to provide flexible leasing with competitive rates—all while allowing businesses to upgrade to the most state-of-the-art commerce. The EFS program works with Fair Market Value (FMV) and $1 Out Financing options.
Windstream also offers a rental program which is not part of EFS.
Leasing is an ideal solution for:
- Preserving your company’s line of credit. Taking a loan from a lending institution taps into your line of credit that you may need further down the road.
- Lowering costs. Traditional bank loans often require higher down payments and the loan has to be capitalized which means it cannot be depreciated.
- Keeping the purchase off your balance sheet. Under the FASB 13 rules, financing programs may qualify for "off-balance-sheet financing" and provide some benefits to your organization.
- Potential tax benefits. Many Windstream programs provide you with tax benefits. A lease may be treated as an operating expense and be fully tax-deductible.
- The time/value of money and the Rule of 72. Consider how spending your company’s capital on equipment today could actually cost you money by not getting a return. Instead, think about investing it on an appreciating asset.
- Future-proofing your business. The FMV option is an innovative financing plan that allows you to upgrade your equipment should your communications needs change, ensuring you will always have the latest technology.
Leasing with Windstream is an ideal solution for:
- One-stop shopping. You can bundle network, equipment, software, services, consulting and fees into one financing option.
- Convenient billing. With a bundled deal, the lease payment is billed and collected (on behalf of the bank/leasing company) on the Windstream network invoice.
- Subsidy credit. Windstream shares a portion of the network margin to assist you in paying for your purchase.
Leasing Options
The FMV Lease Option is an operating lease (true lease) contract in which you make monthly payments for a specified term without intent to own the system.
- Usually qualifies for “off-balance-sheet” treatment, which means the payment is written-off each month as an operating expense in pre-tax dollars.
- The asset can either be returned, purchased for an FMV at the end of the term or financed longer term.
- Offers many tax benefits and typically the lowest monthly payment.
The $1 Out Lease Option is a $1.00 Purchase Option Lease (capital lease or conditional sale) contract in which you make monthly payments for a specified term with intent to own the system.
- From an accounting standpoint, this lease is treated as an asset on your balance sheet, with tax benefits being taken in the form of depreciation.
- You can purchase the leased items for $1.00 at lease end.
- “Soft Service” items must all be $1BO.
The Rental Program is a rental option, offering you flexibility and peace of mind with the ability to update equipment and technology at any time.
- Upgrade to a new communications system with a new, recast financial contract as your business needs change without any out-of-pocket expenses or increase in payment.
- Cash is not tied up in a depreciating phone system asset.
- In most cases, qualifies for “off-balance-sheet financing” and may also provide significant tax benefits such as fully deductible payments.
Choosing an Acquisition Option: Cash vs. Leasing/Financing
When businesses evaluate new technology, they often ask themselves the obvious question: What do I buy? But so often, they overlook an equally important question: How should I buy?
- Buying may seem to make sense. After all, you then own your equipment, plain and simple. But what do you really own? Technology depreciates at an amazing rate. Do you want to use your capital to pay for a depreciating asset?
- Ownership offers practically no benefit when it comes time for replacement. Although buying technology gives you ownership, it may not be the most economical means of acquisition.
- Consider how spending your company’s capital on depreciating equipment today could actually cost you money by not getting a return. The Rule of 72 states that if you invest or recycle your capital back into your business, you will not only see a return but also reveal the hidden benefit of financing. Here’s how it works: Simply take your corporate rate of return and divide it into 72. The answer is how long it will take to double your money. Therefore, assuming a 15 percent rate of return and dividing that into 72, you will double your money every 4.8 years.