Microscan Financeand Leasing Programs Overview

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UIPMENT!

Paul Kendall

Regional Manager

Vendor Services

Ph. 949-553-3467

Fax. 949-399-3167

pauldk@balboacapital.com

FINANCE PROGRAMS

STATED OPTION LEASES

A stated option lease allows a company to finance equipment without a large up-front payment. While there is a large payment at the end of

a stated option lease, the customer's monthly payments are reasonable. This enables the customer to retain cash flow while using the

equipment. At the end of the stated option lease, the customer can purchase the equipment for a guaranteed amount — thus eliminating the

risk of making an unknown "fair market value" purchase. A company should consult a CPA or tax consultant to determine whether an option

lease is in its best interest.

FAIR MARKET VALUE LEASES

Also called an Off Balance Sheet Lease, this financing option is linked to the covenant the company has with the bank, financial institution, or

bonding company for an On Balance Sheet debt. It's similar to the stated option lease in that there can be a lump sum due on the

equipment at the end of the lease. The amount due is based on the fair market value of the equipment at the end of the lease period, as

appraised by the financial institution.

ACCELERATED PAYMENT PROGRAMS

An accelerated payment program is the quickest way for a company to build equity. Such a program increases the value of a trade

allowance in the event of an early trade-in and is ideal for companies who don't have a huge net worth. Of all the financing options, this has

the lowest gross repayment. The customer will actually be paying less in interest costs. Since the company is paying the bulk of the equipment

cost in the early years, the accelerated payment program is also one of the most attractive to lenders.

SKIP PAYMENT PROGRAMS (90 Day No Pay, $100 for first 6 months)

The skip payment program is designed to match the customer's sales period. It is often the ideal choice for companies that have equity

and are able to make higher payments during the nine months of the year that they are producing. With a 90 Day No Pay option, the

customer can take delivery of the equipment without having to make regular payments for 90 days. The customer can also start making

revenue before real payments even begin by paying $100 for the first six months and then beginning normal payments thereafter.

CONDITIONAL SALE CONTRACTS

As the most common financing option, the conditional sale contract requires an initial down payment and level payments spread out over

several years. Often referred to as a straight purchase, this is the easiest repayment structure of all. With a conditional sale contract, a

company usually establishes equity up front by making a significant down payment with no money due at the end of the contract.