Section 179 Decoded

Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income.


The purpose behind Section 179 - to motivate the American economy (and your business) to move in a positive direction. For most businesses (adding total equipment, software, and vehicles totaling less than $139,000 in 2012), the entire cost can be written-off on the 2012 tax return.

The total amount written off ($139,000 in 2012), and limits to the total amount of the equipment purchased ($560,000 in 2012). The deduction begins to phase out dollar-for-dollar after $560,000 is spent.

All businesses that purchase, finance, and/or lease less than $560,000 in new or used business equipment during tax year 2012 should qualify for the Section 179 Deduction. If a business is unprofitable in 2012, and has no taxable income to use the deduction, that business can elect to use 50% Bonus Depreciation and carry-forward to a year when the business is profitable.

The most important difference is both new and used equipment qualify for the Section 179 Deduction. Bonus Depreciation covers new equipment only. 

The equipment, vehicle(s), and/or software must be used for business purposes more than 50% of the time to qualify for the Section 179 Deduction. Simply multiply the cost of the equipment, vehicle(s), and/or software by the percentage of business-use to arrive at the monetary amount eligible for Section 179.

2012 Deduction Limit = $139,000 For new and used equipment, as well as off-the-shelf software.

2012 Limit on equipment purchases = $560,000 This is the maximum amount that can be spent on equipment before the Section 179 Deduction available to your company begins to be reduced.

Bonus Depreciation = 50% This is taken after the $560k limit in capital equipment purchases is reached.   Bonus Depreciation is available for new equipment only. Bonus Depreciation can also be taken by businesses that will have net operating losses in 2012.

Contact us for a bid on your capital purchase before year end.   Don’t miss out on Section 179 deductions and Bonus Depreciation 801 816 0800

NEWS RELEASE East Coast Coal Fired Power Provider Partners with Mazuma Capital in Funding a Fly-Ash Conditioning System

DRAPER, UTAH July 2012–Mazuma Capital, a leading national direct lender, today announced it has funded $1.3M for a large East coast power provider.

The power provider sought a knowledgeable funding source with the ability to provide a solution to a complicated transaction. In order to comply with state environmental standards the company needed to condition their waste into coal fly-ash before depositing waste in state landfills.

The company was set up as a multi-layered organization with disparate corporate entities having varying degrees of ownership.  Due to this structure and the difficulties it posed, the incumbent bank for the power provider passed on providing financing for this equipment, in spite of the fact that the company has excellent credit. The additional challenge was financing almost 50% of “soft costs”, to include labor and installation along with a blanket UCC filing that would not subordinate.

After navigating the review of several of the company’s opaque organizational charts, the risk factors, and equipment, Mazuma agreed to fund this transaction

“This power producer had a very unique set of complications that we were able to work through. Our team was innovative and methodical in our approach to the deal, which ultimately provided the terms in the manner the company needed. It is transactions of this nature that really spotlight the unique funding abilities Mazuma has within the industry”, said Jared Belnap, CEO and President at Mazuma Capital.

About Mazuma: Mazuma Capital is committed to our client’s success. Our unique capabilities and innovative product offerings provide solutions accelerating financial growth. Servicing both rising companies and established businesses, Mazuma continues to secure its position as the middle-market industry leader. We build long-term relationships by delivering on our commitments. Mazuma co-authored the Utah Best Practices Alliance. Mazuma Capital subscribes to the ELFA Code of Fair Business Practices and NAELB code of ethics.

Media Contact:

Julie Fuchs

801-816-0800 Ext. X291jfuchs@mazumacapital.com

Emerging Leader- Jared Belnap

http://www.worldleasingnews.com/articles/jared-belnap-president-mazuma-capital/

Jared Belnap, President, Mazuma Capital

By Abigail Sutton, Editor

During his tenure in the leasing industry Jared Belnap has personally closed over $150 million in lease transactions and has garnered extensive experience in credit, syndication, sales, legal, documentation, and executive management. Belnap helped create Mazuma. First, as a co-founder and private investor, then, serving as vice president of sales/corporate secretary through December 2007 and in his current position, as president since January 2008. His performance and experience have been invaluable in the formation and implementation of Mazuma’s infrastructure, website development, marketing, documentation, sales and sales management, formation of key strategic relationships and other important functions within Mazuma’s framework. Belnap is an introspective leader who achieves success through calculated risk, for this and more we chose him as February’s Emerging Leader.

Teri Gerson, President & CEO of Executive Solutions for Leasing and Finance, Inc. had this to say about Belnap’s skill and leadership, “Jared Belnap has impressed me with his commitment to analyzing before pulling the trigger.  This saves tremendous back pedaling, both with market entrees, employee hires, and sales force structure. He is thoughtful, honest, and fair in all of his dealings, and always takes a broad view without sacrificing practicality and reality relative to his company.”

Mazuma Capital (Equipment Lease & Financing/Direct Lending) - Draper, UT...

Mazuma Capital Funds $12.5m Transaction For Thermal Coal Producer

DRAPER, UTAH, February 17, 2012 – Mazuma Capital, a leading national direct lender, today announced that it has funded over $12.5 million dollars for a U.S. high quality thermal coal producer.

The coal producer sought several funding sources that had expertise in funding newer companies. They had many challenges present in the transaction from the type of equipment, to the documentation aspect.  There were also several factors that affected the credit due to recent mergers.  Due to these challenges the financing was denied through several well-known banks and vendors. Mazuma Capital was ultimately the right financing source to help structure and fund the transaction.

A favorable structure was an important objective in order to provide cash flow, the appropriate tax, and accounting factors to meet the financial goals of the company. The structure also needed to provide the ability to expense the payments over time.  Mazuma Capital was able to secure an approval in a timely fashion while meeting the needs of the company; from the terms to the unique structure.

“This is a newer company that is still in the midst of a huge growth phase.  Therefore, this transaction produced several challenges in finding a suitable financing structure to meet the goals of the company.  The lack of history, recent buyouts, and mergers made this a more difficult credit.  Our team worked hard to develop a perfect balance with the right structure, and suitable terms for the company,” said Jared Belnap, President and CEO of Mazuma Capital.

About Mazuma: Mazuma Capital is committed to our client’s success. Our unique capabilities and innovative product offerings provide solutions accelerating financial growth. Servicing both rising companies and established businesses, Mazuma continues to secure its position as the middle-market industry leader. We build long-term relationships by delivering on our commitments. Mazuma co-authored the Utah Best Practices Alliance. Mazuma Capital subscribes to the ELFA Code of Fair Business Practices and NAELB code of ethics.

Media Contact:

Julie Fuchs

801-816-0800 Ext. X291

jfuchs@mazumacapital.com

Equipment Leasing Slowly Rising

U.S. business borrowing for equipment up in Sept.

Oct 24 (Reuters) - U.S. companies borrowed more to buy or lease capital equipment in September and did a better job of keeping up to date on their existing debts, boosting a key measure of business activity, a lender group said on Monday.

The Equipment Leasing and Finance Association said U.S. businesses originated $7.1 billion in new loans, leases and lines of credit last month, up from $5.7 billion in August.

Companies use that money to invest in everything from tool-and-die machines and delivery trucks to office furniture and computer software.

"It's a replacement environment," ELFA President William Sutton said in a phone interview. "People aren't in a growth or expansion mode."

Demand for finance was up in the agriculture, healthcare and information technology sectors, Sutton said. The construction and trucking sectors remained weak.

The group, which represents the lenders who finance half the capital investment in the United States each year, said 2.3 percent of borrowers were 30 days or more behind in paying their debts, down from 2.5 percent in August and the lowest reading since late 2006, before the recession.

ELFA's confidence index rose to 50.7 in October, up from 47.6 in September. The diffusion index centers around 50, with any reading above that point positive and one below negative.

Source: Reuters

http://www.reuters.com/article/2011/10/24/usa-economy-elfa-idUSN1E79N0JS20111024

Equipment Leasing Finance Industry Update

ELFA Survey: ‘What’s Hot, What’s Not’ in 15 Equipment Leasing, Finance Industries

The medical equipment, oil/gas/energy and machine segments of the equipment finance industry have the most optimistic outlook for 2011, according to a recent survey of asset managers and consultants by the Independent Equipment Company in cooperation with the Equipment Leasing and Finance Association.
The results of the 2011 “What’s Hot/What’s Not” Equipment Leasing Trends Survey, to be released at the ELFA Equipment Management Conference in St. Petersburg, Fla., reveal that industry perceptions of 15 equipment markets are split, but show considerable improvement over 2010. The results indicate the industry is returning to pre-recession levels and a greater volume of equipment is expected to be leased in 2011 than in 2010.
Survey respondents ranked 15 equipment types as follows, in order from highest-rated to lowest-rated:
1. Medical equipment
2. Oil/gas/energy
3. Machine tools
4. Truck/trailer
5. Hi-tech/computers
6. Aircraft
7. Rail
8. Containers/chassis
9. Construction
10. Telecom
11. Marine/Intercoastal
12. Automobiles
13. Plastic
14. Furniture/fixtures/equipment
15. Printing
The full report and survey methodology are available on the ELFA website at http://www.elfaonline.org/ind/topics/AssetMgmt/.
The 2011 “What’s Hot/What’s Not” Equipment Leasing Trends Survey was conducted in January and February 2011. A total of 155 industry professionals responded to the six-question online survey, of which 93 percent were lessors, asset-based lenders or financial advisors and seven percent were service providers. For more information, visit http://www.elfaonline.org/ind/topics/AssetMgmt/.
The Equipment Leasing and Finance Association is the trade association that represents companies in the $521 billion equipment finance sector, which includes financial services companies and manufacturers engaged in financing capital goods. Its more than 600 members include independent and captive leasing and finance companies, banks, financial services corporations, broker/packagers and investment banks, as well as manufacturers and service providers. In 2011, ELFA is celebrating 50 years of equipping business for success.