Questions about financing? Want to learn more about how a lease agreement works? Confused about the financing timeline? Learn all about the Blue Street Capital financing process here on our FAQ page!

What can be included in a financing agreement?

One of the advantages of financing is that consulting, training, shipping, installation, software and initial maintenance CAN be financed and included in the financing payments. Unlike loan financing, these costs, also known as “soft costs” can be included in the financing agreement.

What does the financing process look like for vendors?

  1.  Equipment vendor generates a lead and calls us: Simply provide the customer name, phone number and your quote, we will take care of the rest!
  2. When the paperwork is ready, you ship/install your products and fax the invoice to us.
  3. We will send funds upon customer’s verbal confirmation.

What does the financing process look like for businesses in need of technology?

  1. Application is submitted
  2. We request any other financial information that is needed
  3. After approval, [typically one day] documents are prepared for signature
  4. After signed documents are received, a purchase order is issued
  5. We can pay any deposits or progress payments to approved vendors
  6. Equipment is delivered
  7. Upon receipt of an invoice, payment is made after verification of delivery.

What happens when a vendor requires a deposit?

In the event the vendor requires a deposit, you have the option to pay the deposit directly to the Vendor and finance the remaining balance, or finance the entire cost of the equipment including the deposit.

You will be able to receive a refund of any deposit you make. This means that we pay the vendor in full, the vendor will return your deposit or we will reimburse you directly.

Do I need to have insurance on the technology or equipment I am financing?

Insurance is required for the duration of the finance agreement.  An Insurance Authorization page will be included with the initial document package.  We can reach out to request the certificates of property and liability on your behalf.  

Can I lease equipment if I have already purchased it?

Yes. This is known as a sale-leaseback. We can consider Sale Leaseback transactions, assuming the purchase took place within 60 days of the approval/review date and funded within 90 days of original purchase date.

Does Blue Street Capital offer working capital options?

Blue Street Capital does offer working capital options.  The overall product structure – $25k to $500k, 1-5 year terms and funding within 7-10 business days.  Please contact us for more details and structure options.

What are some of the main differences between buying technology with cash, loans, or financing agreements?


Payment Type  & Features



Finance Agreement

Cash Flow

Buying has an immediate impact on cash flow by diminishing cash reserves.Down payment required and loan payments are generally higher than lease payments.No down payment required. Financing usually has less impact on cash flow due to lower payments.

Line of Credit

Liquid assets are depleted and may affect credit.Taps the line of credit.Does not affect line of credit.

Equipment Risk

The owner bears all the risk of equipment devaluation. Obsolescence must be tracked by the owner.The owner bears all the risk of equipment devaluation.  Obsolescence must be tracked by the owner.In many finance agreements, the burden of taxes and insurance is managed by the financier.

Asset Liability

Owners must manage asset liability on their books. Financial accounting requires owned equipment to appear as an asset with a corresponding liability on the balance sheet.Owners must manage asset liability on their books and are required to have equipment appear as an asset with a corresponding liability on the balance sheet.Operating lease assets are expensed. Such assets do not appear on the balance sheet, which can improve financial ratios.

Rate Risk

Cash should be used for income producing investments since you pay with today’s dollars at today’s value.Banks prefer to loan money on a floating or variable rate tied to prime. Rate risk is on the customer, not the bank.Payments are fixed for the finance agreement term. Pay with next year’s inflated dollars – take advantage of inflation.

Soft Costs

Soft costs such as installation, training can erode cash reserves.Banks rarely finance soft costs. Cash is  usually needed.Financing may cover all soft costs including maintenance and software.


Owners must manage disposal/selling of outdated equipment. This can slow down the upgrade process.Owners must manage the disposal/selling of outdated equipment. This can slow down the upgrade process.Financing allows for easy upgrades or additions and keep the same payment by simply extending the lease term.

What are the benefits of equipment financing?

Here are a few ways equipment financing can benefit your company:

  • 100% Financing. Financing covers 100% of the equipment cost with room to add soft costs including training, installation, and maintenance.
  • No Down Payment. A security deposit equal to two months rental payments is usually all that is required.
  • Possible tax savings*. If a company is in the 34% tax bracket and has a finance agreement with a monthly payment of $500, the payment may be reduced to $330 – that’s a monthly savings of $170 ($500 x 34%) or $2040 annually. *Consult your tax advisor.
  • Flexibility. Customize a lease to fit your particular situation with skip payments or seasonal payments.  
  • Use inflation to your advantage. If you pay cash for your equipment, you pay with today’s dollars at today’s value. Through financing, you pay with next year’s inflated dollars, and the next, and the next.
  • Increase profits immediately. With financing, you only need to cover the monthly payment for the new equipment to be profitable from the first month. Example of the cost effectiveness of a finance agreement:

A monthly payment of $500 divided by 30 days = a daily cost of only $16.67! Divide $16.67 by 8 work-day hours to get an hourly cost of $2.36!

  • Preserve bank credit lines. Financing doesn’t affect your bank borrowing limits. You still have 100% of your credit available.
  • Avoid obsolescence. Upgrade finances are easy with most modern equipment always available.
  • Conserve working capital. Cash isn’t tied up in overhead, it’s free for income producing investments. Financing improves cash flow and does not require a down payment.  You can acquire the equipment and software you need without tying up capital with 100% financing. Use your working capital for other areas of your business such as expansion, improvements, marketing or R&D.
  • Financing agreements may have accounting benefits. Monthly payments may be deductible as operating expenses rather than accounting for the equipment as an asset
  • Combine Multiple Vendors:  Combine products from multiple vendors into one easy monthly payment.
  • Speed and Simplicity:  Financing approvals can be obtained in hours and can allow you to respond quickly to new opportunities with minimal documentation and red tape.  With financing, inclusion of your financial statements is generally not necessary if your transaction amount is below $150,000.

What is a UCC? What is a Subordination Letter?

A UCC will be filed as soon as possible [when docs go out], even before collateral is delivered.  *[This MUST be filed within 20 days of receipt of any part of the equipment]

UCC-1 financing statements will be filed on each transaction.  A valid Organization Number is required on all Corporations, Limited Liability Companies, and Partnerships.  

A fixture filing will be filed any time the leased equipment could be considered a fixture to the real property.

In the event a security interest is not perfected due to timing issues, or if the transaction is structured as a sale leaseback, subordination letters will need to be obtained from all secured parties that have a blanket lien over the company

What are the tax benefits of financing equipment?

TAX BENEFITS:  The IRS does not consider an operating lease to be a purchase, but rather a tax-deductible expense where the entire payment may be 100% tax deductible. The equipment is not recorded as an asset, nor does it become a long-term liability, and instead can be treated as an off balance sheet operating expense.

Tax treatments are determined by state and the end of term option [Buyout Option].  Documentation fees are taxable in California.  Sales tax will be collected and remitted to each state by Blue Street Capital, LLC.  Sales tax will always be based on the equipment location.

Have any questions?

Feel free to drop us a line! We would love to hear from you. Click the link below and one of our technology focused financing specialists will reach out within one business day!

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