Whether you are considering menu expansion, investing in the new technology of automation to reduce costs and provide on-demand performance, or creating a whole new business your decision to purchase Twirl Pasta's remarkable cooking system can help you improve performance and build your profits.

Twirl Pasta works with experienced equipment finance companies to help you make your purchase quickly and easily while preserving your important cash resources. This section provides information that can be useful to your decision making.

The Lease / Purchase Decision

This important decision depends entirely on the financial strategy and structure of your company. Whether your business is a small independent operation or a large multi-unit chain, the wise use of cash is a critical long term decision. Especially for newer and growing companies the decision is frequently made to Conserve Cash by taking advantage of lease alternatives.

Twirl Pasta Company works with several financing sources to enable you to acquire the equipment you need with Low Monthly Lease Payments to build your business. If you are new to leasing you may have some questions about this alternative. For your consideration we have provided responses to questions that are frequently asked about leasing. Read the About Leasing section below to learn more. In all cases you should first check with your trusted financial advisors to make the best choice for your business.

Tax Incentives
Congress recently passed the Economic Stimulus Act of 2008. Two significant business tax provisions of the Act could affect your equipment purchase decisions and result in important continuing tax savings for your company.

Small businesses are encouraged to purchase new equipment under Section 179 of the tax code that permits immediate expensing of certain purchases in qualifying situations. The new stimulus package doubles the expense limit of this provision from $125,000 to $250,000. For larger businesses, the Act provides so-called Bonus Depreciation that increases the percentage of an equipment purchase that can be immediately depreciated to 50% of the purchase. These provisions apply to equipment that is purchased and placed in service in 2008.

Please check with your trusted financial advisors to understand how these new tax incentives may affect your purchase decisions.

Frequently Asked Questions About Leasing

What is the difference between leasing and bank financing?

The main difference is Ownership. With bank financing you own the equipment. You make monthly payments of principal and interest to repay the loan over time. With leasing, the leasing company owns the equipment. You make a monthly lease payment to use the equipment. Most lease programs offer you the opportunity to purchase the equipment at the end of the lease period.

What is the interest rate of the lease?

There is no interest rate as such with leasing. There is instead a monthly payment just like the payment you would make to lease an apartment or your restaurant space. The lease payment is for your use of the equipment. The amount of the lease will depend on the cost of the equipment you purchase, the length of time you choose to lease the equipment, the purchase option you choose at the end of the lease, and the financial history of you and/or your company.

What if I change my mind? Can I cancel or pay off the lease?

The leasing company has made a long term commitment to purchase the equipment for your use. So, you cannot cancel the lease. However, in most circumstances you can pay the lease off early but this could be a disadvantage to you. You should ask your tax accountant to help you understand the tax consequences of this decision.

Are there tax benefits associated with leasing?

You may be able to deduct the monthly lease expense as a business expense on your tax return. The advice of your tax accountant should be determinative.

If I don’t own the equipment then who do I call if I have a problem?

The manufacturer of the equipment is solely responsible to respond to you for service or warranty issues you may encounter. Service may be coordinated by the manufacturer’s dealer, distributor, or authorized service agent that installed the equipment. The leasing company’s role is only to assist you to obtain the equipment to use in your business, just as a bank would if you secured a bank loan to purchase the equipment.

Am I personally responsible for payments under the lease agreement?

In most cases, the answer is yes. Credit Managers are expected to and do make fast and accurate decisions on lease requests. Readily accessible payment information is not publicly available for businesses but it is routinely available for its principles through reliable credit bureaus. Also, while the lease may be under the name of your business, for most small businesses the operating experience of the business is not readily distinguishable from that of its owner(s).

Why am I required to insure the leased equipment?

While the equipment is owned by the leasing company, the purpose of the lease is for your use benefit. So the leasing company must be assured that if the equipment is destroyed or stolen and you are no longer able to receive revenue from use of the equipment that the balance of the lease obligation will be paid off from the proceeds of the insurance policy. Your commercial insurance policy probably already covers leased equipment; all you are required to do is to notify your insurance agent and request that an endorsement for the leased equipment be forwarded to us at no cost to you.

Are there any other expenses I am responsible for, like taxes?

Many states and local jurisdictions require that a sales or use tax be paid on each monthly payment. However, since the lease payment was calculated in advance and the tax rates change periodically, this tax amount must be billed separately. Some states bill the full amount of the sales or use tax at the inception of the lease. In these situations the tax amount will be added to the equipment cost and become part of the monthly payment.

Many states also charge an annual tax on tangible personal property. Since the leasing company is the legal owner of the equipment, it is required to pay the tax. The lease payment does not include these costs. This amount is passed along to you in a lump sum as they are received by the leasing company. Because these taxes change periodically the amount cannot be known and therefore cannot be included in the calculation of the monthly lease payment.

Does the monthly payment include the costs of shipping, installation, and service contracts?

The monthly payment is based on the full invoice cost to the leasing company of the equipment package you have selected. If these costs are billed as part of the equipment invoice then yes they can be used to compute the monthly lease payments.

What is the Documentation Fee?

The leasing company does not charge an application fee. However, we do charge a nominal fee to defray our cost to process the lease documents and to reimburse us for fees incurred in filing UCC-1 statements.


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