Corporate Art Leasing

Masters Canvas Corporate Art Leasing Program

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Why Lease Art?
  •  Meet Any Business' Needs - An art lease agreement is a contract in which the user (the lessee) pays for the use of the art while the lessor owns the art. Leasing has become an increasingly popular method of resource utilization because it offers a number of advantages over more traditional alternatives, such as cash purchase or bank financing.

  •  Conservation of Capital - The capital conserved, while leasing art as an operating expense, can be utilized for other capital expenditures. The average return on capital can range from 10% to 25% AFTER taxes.

  •  Conservation of Credit - A lease is not a loan. Borrowing reduces lines of credit. Leasing is an operating expense and hence, allows the customer increased borrowing capacity.

  •  Off Balance Sheet Financing - An operating lease keeps the debt, and the corresponding asset, off the company's balance sheet. Therefore, borrowing debt covenants are circumvented, financial ratios are enhanced, and borrowing capacity is increased.

  •  Tax Benefits - An operating lease may allow 100% of the monthly payment to be included as an operating expense. Bank financing would allow only the interest costs to be included as operating expenses. Check with your tax advisor to determine how this may LOWER pre-tax income and REDUCE taxes.

  •  Flexible Financing - Masters Canvas leasing provides fixed rate financing with specially structured terms to accommodate the specific needs of the company.

  •  Flexible Lease Structure - Masters Canvas offers flexible leasing options to meet business' unique needs. These structured leases include operating and capital leasing plans.
Types of Leases
  •  Fair Market Value (Operating Lease) - For companies uncertain about purchasing, this plan offers various options during and at the termination of the lease agreement. The plan is particularly beneficial for companies desiring a small security deposit and a relatively low monthly payment. At the end of the lease term, the lessee has the option to extend the term of the lease, return the art, or buy the art at its fair market value. Masters Canvas offers financing for purchase of the art at the termination of the lease agreement. An Operating Lease may allow for the lease payments to be included as operating expenses (in the case of non-purchase) or for capital costs to be deferred to the end of the lease, when a decision to retain or change the art can be made.

  •   $1.00 Buy-Out - The recommended plan for companies fairly certain they wish to purchase the art at the end of the lease agreement. At the end of the lease term, the art is purchased for $1.00. (A nominal charge for processing the title transfer may also apply)

  •  10% Security Deposit Plan - This program offers the lowest monthly payment with a security deposit of 10% (of the price of the art.) End-of-lease options are available as follows:

           The deposit can be applied to the purchase price of the art;

           Extend the term of the lease; or,

           The art can be returned and the deposit refunded.

    Masters Canvas offers financing for balances with purchase options.

  • 10% Purchase Option Plan - This plan offers the lessee a fixed purchase option at the end of the lease term. End-of-lease options are as follows:

          Extend the term of the lease;

          Return the art; or,

         
    Buy it at 10% of the original Fair Market Value.

    Masters Canvas offers financing for purchase options.
Frequently Asked Questions
  •  Why Lease? - Leasing offers fixed regular payments; provides financing for 100% of the art cost; conserves both working capital and lines of bank credit; and may offer certain tax advantages.

  •  Who Can Lease? - Any company, organization, or association.

  •  What Is the Process for Leasing Art? - We review the credit information supplied on the lease application. Upon approval, Masters Canvas prepares the lease agreement. When the art is delivered, we begin billing the lessee for the agreed upon lease payment.

  •  Is A Down Payment Required? - A security deposit, usually equal to one or two months' lease payment, is generally needed. This differs from a down payment in that the amount is typically much smaller and it is a deposit which may be applied to the purchase price of the art at lease-end, or returned if there are no other payments due.

  •   How Are Lease Payments Determined? - The monthly payment is based on the term of the lease, price of the art, and the type of leasing plan chosen. The term of a lease may run from 12 to 60 months.

  •  What Factors Are Used To Determine Credit Worthiness? - Type of business, length of time in business, financial condition, references from financial institutions, and Dun & Bradstreet (D&B) or other credit bureau ratings.

  •  Can the Lease Be Canceled? - No, but art can traded for other, leased art before the expiration of the initial term. We also offer a special rate for "buy-out" options during the term of the lease.
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