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Equipment Leasing

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Capital Expenditure (CAPEX) is capital that a business invests on assets such as technology, property, plant, work spaces, and general equipment. Depending on the size of the business, CAPEX can vary from less than $10,000 to well over $100 million.

An experienced CAPEX advisory firm can give your business a major strategic and cost advantage over your competitors with a well planned and executed CAPEX strategy.

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Why Alchemy?

Alchemy's Financial Group has over 60 years of Technology CAPEX Planning and Budgeting experience across a wide array of projects, budgets and industries—for mission-critical IT infrastructure investments from less than $100,000 to over $100 million.

We understand technology, strategy and finance. And we have the relationships and experience to deliver on-time, low cost financing to meet your requirements.

With Alchemy, you get:

  • CAPEX plans and budgets aligned with your strategic goals
  • A robust and comprehensive planning, budgeting and reporting framework
  • Faster CEO and Board-level internal approvals for your CAPEX budget
  • Quick access to low-cost leasing or external financing (if needed)
  • Reduced risk of CAPEX losses or investment overruns
  • Comprehensive reporting from start to finish

Our Approach

Understand Your Company: First, we understand your company—its business, strategic goals, finances and competitive positioning. Then we try and understand, in detail, your Technology CAPEX plan and budget, investment motivation and goals, investment alternatives, return on investment (ROI), business case and related information.

Understand Your Industry: Next, we quickly come up to speed on your industry and competition, and gather information on similar investments made in your industry or in other relevant industries. We use this information to build a comprehensive information-base of relevant parameters, outcomes and results.

Develop Comprehensive Plan: Finally, we work with your team—either closely or quasi-independently depending on your team's availability and skill sets—to develop a comprehensive business case, ROI model, CAPEX plan and budget.

The plan includes a comprehensive timeline for the CAPEX investment and projections for future revenues and expenses. We track variances, overruns and incremental CAPEX investments against the plan, budget, milestones, deliverables and schedule.

We run what-if scenarios to account for variances in key parameters. And we involve a cross-functional team—Sales, Marketing, Technology, Strategy and Finance—to ensure we've covered all bases.

Upon completion of the CAPEX investment, we monitor actual revenue, performance and profits against the plan, and flag material variances.

Investment Financing: In parallel, we advise you on various financing options such as bank loans, leases or asset-based lending, and interface with lenders or lessors to get you capital, on time and at the lowest possible cost.

The Importance of Technology CAPEX Planning and Budgeting

In today's business world, CEOs understand that investments in technology are an important part of their business strategy. As a result, capital expenditure (CAPEX) on technology makes up a significant chunk of a corporation's overall budget pie.

Technology investment dollars are sizable—anywhere from under a million to the hundreds of millions. There is increasing pressure on justifying CAPEX investments to shareholders, and public companies face more scrutiny than ever before. Investors, analysts and Board members ask tough questions on CAPEX planning and budgeting, and are quick to pan or praise a company based on the answers they get.

Corporate expenditures and their resulting benefits are very closely monitored. Cash is tight, and investments need to be prioritized so the company gets the most bang for its buck. Gone are the days when investments were made on flimsy CAPEX business cases and no one followed-up on how actual results compared with projections.

Today, CEOs want to understand everything about a sizable CAPEX investment:

  • Why is it being made
  • What are the risks, benefits and strategic advantages
  • What is the impact on revenue, profits and competitive positioning
  • What other investment alternatives were considered
  • What is the business case and ROI
  • Was Sales, Marketing and Finance input included
  • What are the financing options

As a trusted and experienced CAPEX planning and budgeting partner, Alchemy Financial Group can guide you through all these critical phases from start to finish, and maximize your company's ROI from its various CAPEX investments.

Equipment Leasing

Alchemy Financial Group Product options range from Private Label Programs (branded with the manufacturer’s name) to Venture Backed Financing.

Financing programs and services we can provide include:

› $1 Purchase Option/Finance Leasing

With this lease option, your business retains the right to own the equipment at the end of the lease while managing cash flows and maintaining credit lines for essential expenses.

The $1 Purchase Option lease offers other benefits. You can wrap Hardware and non Hardware products such as software, services and training into a monthly payment. We provide financial solutions tailored to help you manage your technology and create a refresh plan that meets your needs.

The $1 Purchase Option lease is just one of several options designed to address the unique opportunities and challenges you face in an ever-changing economy. Alchemy Financial Group has an ideal way to keep your business ahead of the curve.

› 10% Purchase Option Lease

In today's ever-evolving business climate, the Fair Market Value lease gives you the lowest monthly payment while providing the maximum end of term flexibility. As technological innovation continues at a rapid pace, your ability to manage technology assets is key.

New equipment helps increase productivity, keeping you ahead of your competition. The Fair Market Value lease provides for low monthly payments and the widest range of end of term options to accommodate your ever-changing needs. The Fair Market Value lease is ideal for companies in need of the latest technology available and who refresh or upgrade every 12, 24 or 36 months.

Monthly payments are generally lower than traditional bank loans or leases with pre-determined, fixed end of term purchase options.

We provide financial solutions tailored to help you manage your technology and create a refresh plan that meets your needs to keep your business ahead of the curve.

› Equipment Leasing

As new opportunities arise, the need for additional equipment becomes urgent as businesses strive to move forward. Whether a small family enterprise or a multinational corporation, all companies share a common denominator—cash flow is the lifeblood of business. Even for a company with large cash reserves, financing equipment acquisitions makes business sense by matching cost to benefit. Cash flow becomes predictable and justifiable. Rather than tying up precious working capital or bank lines, smart businesses let the equipment benefits pay for the equipment...while their cash reserves and borrowing power work to fund their future success.

When there is a lack of budget dollars for new equipment, everybody suffers.
Budget problems are shared by both equipment vendors—and the businesses who need the equipment. When budget dollars aren't available, purchases are often put on hold, stifling the progress of the company. The only people who benefit...are your competitors.

When a business chooses to finance, the cost of the equipment is spread over a multiple-year term — keeping more working capital liquid to fund investments such as additional payroll or facility expansion. The business has the equipment when it is needed, rather than waiting until cash is on hand. And the equipment vendor benefits as well—with a shorter sales cycle and 100 percent cash up front.

› Fair Market Value Leasing

In today's ever-evolving business climate, the Fair Market Value lease gives you the lowest monthly payment while providing the maximum end of term flexibility.

As technological innovation continues at a rapid pace, your ability to manage technology assets is key. New equipment helps increase productivity, keeping you ahead of your competition. The Fair Market Value lease provides for low monthly payments and the widest range of end of term options to accommodate your ever-changing needs.

The Fair Market Value lease is ideal for companies in need of the latest technology available and who refresh or upgrade every 12, 24 or 36 months. Monthly payments are generally lower than traditional bank loans or leases with pre-determined, fixed end of term purchase options. We provide financial solutions tailored to help you

Manage your technology and create a refresh plan that meets your needs to keep your business ahead of the curve.

› Software Financing Programs

While most banks do not consider software a tangible asset, Alchemy Financial Group understands that the hardware in which you've invested a large amount of capital is useless without the right software. Software financing through Alchemy Financial Group is your means of funding the total solution, including associated services, maintenance, and implementation of the software investment. For the software user, costs are spread over a multiple-year term, matching benefits received from the software. This means the business can let the solution pay for itself over the duration of the lease or loan — keeping more working capital liquid to fund investments such as additional payroll or facility expansion.

Leasing is an excellent means of financing software.
Even for a company with large cash reserves, leasing can prove to be the right choice by accounting for software acquisition off the balance sheet. In addition to preserving working capital and credit lines, an advantage for a business that decides to lease is that a lease can often begin immediately—even if provisions for the item are not included in the current capital budget. The advantage for the software vendor is a shorter sales cycle and 100 percent cash up front. When vendors offer financing, they have an advantage over competitors that do not offer the flexibility and ease of leasing. And fewer requests for discounting are heard when a monthly payment is included in the proposals.

› Structured Finance Solutions

Our structured financing solutions combine in-depth industry know-how and financial expertise. We focus on financing to your specific needs – covering both the public and private sector.

The spectrum of our solutions ranges from senior secured corporate loans and structured investment financing to infrastructure and project financing. In addition, our portfolio includes acquisition and growth financing, typically as syndicated loans.

Our structured finance solutions are tailored to the individual needs of our customers in both the public and private sector and help customers enhance their competitiveness and realize growth opportunities.

What sets us apart:

  • Our ability to structure, underwrite and hold positions
  • Access to leading financial institutions for syndication purposes
  • Our flexibility, reliability and expertise

› Tax Exempt Financing/Leasing (State and Local Government)

What is tax-exempt leasing?
Tax-exempt leasing (sometimes referred to as "financing", "lease financing" or "lease purchase") is a financing tool that allows tax-exempt entities to acquire essential use equipment now and pay over time.

Under a tax-exempt lease, title to the equipment passes to the customer at lease signing and the customer owns the equipment at the end of the term with no liens attached. There is no residual at the end nor any end-of-lease buyout. Because the Lessee is tax-exempt, the Lessor is not required to pay federal income taxes on the interest generated by the lease. Thus, lower financing rates are available.

Municipal leases are the most common tax-exempt lease and are designed specifically to meet the needs of local and state government organizations. These leases contain a non-appropriation clause. In the event that the Lessee is unable to obtain funding for future payments (because of budgetary issues), this clause allows the Lessee to terminate the lease at the end of the current appropriation period without any further obligation.

What are the benefits?

There are many benefits to tax-exempt leasing:

Financial Benefits

  • No down payment is required.
  • Lower rates available - Interest income is exempt from federal taxes, therefore, lower financing rates may be available, resulting in lower payments.
  • Hedge against inflation - buy now at today's low interest rates before prices rise.
  • Builds equity.

Operating Benefits

  • It is not considered debt.
  • For municipalities, it is part of the operating budget - Only the current years' payment is in the operating budget.
  • Enables you to replace obsolete or maintenance intensive equipment.
  • Can be implemented quickly since voter approval is not required.
  • Risk is low - For municipalities, the funds for payments are subject to annual budgetary appropriations. If funds are not appropriated, the municipality has the right to terminate the lease without penalty.
  • Lessee takes title - Typically, the Lessee takes title to the equipment at the beginning of the lease. The Lessor takes a security interest in the equipment as collateral.

Flexibility

  • Can be used for large and small projects.
  • Can be used for new, used and refurbished equipment.
  • Flexible terms available (1-5 years, annual, semi-annual, quarterly, or monthly payments).

What can be leased?

Almost anything considered essential to daily operations can be leased on a tax-exempt basis.*

Some examples include:

  • Vehicles (fire trucks, ambulances, street sweepers, snow plows)
  • Government vehicle fleets (school buses, administrative vehicles)
  • Loose Equipment (Defibrillators, Generators, Fire Hose, SCBA)
  • Computer hardware and software
  • Telecommunications Systems
  • Medical Equipment
  • Road Maintenance Equipment
  • Office Equipment
  • HVAC
  • Security Equipment
  • Furniture
  • Real Property

› Venture Financing

Venture financing is designed for venture-backed companies that require some infrastructure for product development, product commercialization or revenue growth. By blending debt and equity this offers the company greater flexibility than traditional bank debt and a lower cost of capital than straight equity, while increasing the ability to obtain financing. In general, venture debt is designed to leverage a company's equity and extend its runway to the next equity financing round.

› Start Up Financing

Start up financing is designed to allow Start Ups, with little to no credit history, the opportunity to acquire financing for Mission Critical IT Infrastructure critical for getting the company on its own two feet. Mission critical IT infrastructure is the starting point of any business, and financing makes room for scalability without large upfront capital requirements. Start Up financing supports company growth and allows companies to achieve goals they had set out to accomplish.

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DreamHost owns a large equity stake in Alchemy Communications.

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Irvine Data Center

Alchemy's newest data center in Irvine, CA, is a state-of-the-art, 42,500 sq. ft. facility located near John Wayne Airport. This carrier-neutral facility is equipped with every essential to house and protect your data.

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