Brian Ladin Examines Using Leases to Finance Vessel Purchases

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Purchasing ships for a fleet can be an expensive process, Brian Ladin says, but it is one that many companies do every year. How do they handle these steps? The biggest help is various types of financing options, including the leasing method. This option is one that Ladin has used over the years and can help many starting companies get the help necessary to get started in their path.

Brian Ladin Examines Lease Financing

Brian Ladin has worked for many years to finance his fleet and has discovered that lease financing is a powerful way to get started. A structured lease financing occurs where the possession of a property goes to the person with a lease. However, a second party (usually a financing business) has ownership of the lease. The lease possessor then pays the owner for the ability to use this item.

In other words, lease financing is the method commonly seen when buying homes, vehicles, or other types of high-priced products. The average person (even the average business owner) likely doesn’t have the full cash amount to give when buying such an item. Ships are particularly expensive and require the use of lease financing in many cases, as this method has helped transform the market in many ways.

For instance, Brian Ladin knows of many small shipping companies that never own a fleet but simply lease them when needed and pay money to use these vehicles. Instead of spending millions of dollars or more on buying a single ship, they spend thousands leasing it for use. Once the delivery is over, their lease term is done, and they can go back to handling business or shipping more goods with a new lease.

This method is also beneficial for those who want to lease to own, as they can set up an agreement in which they pay the owner to eventually take possession and ownership of the ship. While leasing may end up costing more over time, this slow-stream of the payments is usually more affordable for small businesses, making this a good option to start up a strong and capable fleet.

However, Brian Ladin also suggests operating leases, which end when a person is done using a ship. This method was already briefly discussed but can be adjusted for a variety of terms. For example, a company may lease a fleet for a few months for a single shipment or a year or even five years. The lease length will vary, and the payments typically go down with longer leasing times.

Beyond this benefit, leasing also provides major tax benefits by allowing a company to use its tax liability on the capital allowance. Even better, this option can also increase your capital, as any vehicle you are leasing is considered part of your capital. It is also not used against you as a debt, the way that a loan would be used, meaning that your debits and credits are far more balanced and efficient.