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E-2 and Business Vehicle Leasing

E-2 and Business Vehicle Leasing

Old Aug 27th 2014, 9:57 pm
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Default E-2 and Business Vehicle Leasing

Dear all, can anyone recommend a company / companies in Florida that would consider a business vehicle lease to an E-2 business / holder? Rather than buy two cars when we move over, i would prefer to lease through the business (and therefore pass off the cost). Many thanks.
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Old Aug 27th 2014, 10:59 pm
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Default Re: E-2 and Business Vehicle Leasing

Originally Posted by Markstone492 View Post
Dear all, can anyone recommend a company / companies in Florida that would consider a business vehicle lease to an E-2 business / holder? Rather than buy two cars when we move over, i would prefer to lease through the business (and therefore pass off the cost). Many thanks.
You can't lease cars for a business and use the cars for personal use without tax consequences. Only business expenses for the cars can be written off at either $0.56 per mile or the percentage that is used for business based on trip logs. Traveling to and from your place of business and home is not considered a business expense.

It is unlikely that any lender will lend money to a startup company without someone personally signing for the loan. However if it is a legitimate expense, it doesn't matter if the expense is billed directly against the company or against an individual.

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Last edited by Michael; Aug 27th 2014 at 11:03 pm.
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Old Aug 27th 2014, 11:04 pm
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Default Re: E-2 and Business Vehicle Leasing

Thanks Michael.

We are looking at buying a business which has been established for 7 years, and the current owner has taken the very strange route (to me anyway) of using the business for two car loans, buying them outright and then paying the loans through the business.

I would be looking at a more traditional business lease arrangement, and wouldn't be worried about the tax implications.

Cheers,
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Old Aug 27th 2014, 11:20 pm
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Default Re: E-2 and Business Vehicle Leasing

Originally Posted by Markstone492 View Post
Thanks Michael.

We are looking at buying a business which has been established for 7 years, and the current owner has taken the very strange route (to me anyway) of using the business for two car loans, buying them outright and then paying the loans through the business.

I would be looking at a more traditional business lease arrangement, and wouldn't be worried about the tax implications. ....
Typically banks prefer to lend to people not small businesses, so either directly to you, or have you sign guarantees such that you might as well have borrowed directly from the bank in the first place.

That said I am not sure why you'd want to structure the leases through the business if it isn't for a tax benefit (which, as advised by Michael, doesn't actually exist anyway ).
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Old Aug 27th 2014, 11:27 pm
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Default Re: E-2 and Business Vehicle Leasing

Thanks Pulaski, always value your help and opinion.

It's really due to capital outlay. My thought is that if i can save $30k in the bank (at the start), rather than spend it on two cars, and have it there for a rainy day, whilst suffering slightly on the taxation (but have the business pickup the monthly 'cost'), then that's my preference.

But i guess the other option is to put 50% down on each car, and try to get personal financing?

Would help with credit rating too i guess.

Thanks again.
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Old Aug 27th 2014, 11:28 pm
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Default Re: E-2 and Business Vehicle Leasing

Originally Posted by Markstone492 View Post
We are looking at buying a business which has been established for 7 years, and the current owner has taken the very strange route (to me anyway) of using the business for two car loans, buying them outright and then paying the loans through the business.
I don't doubt that he is doing that but if he gets audited by the IRS, he'll likely pay taxes, penalties, and interest on the full cost of the lease since he won't have any records indicating the usage. A second problem is that if he gets selected audit for the cars and there are illegal expenses, usually a full audit of the business will be performed.

Even though the business is 7 years old, I suspect he is signing personally for the lease since it is very easy to bankrupt a business in the US. When my son had his business, the only contracts signed against the business were for phones, internet connection, and rent for the office space but the office space was in an undesirable area with plenty of office space available.

Last edited by Michael; Aug 27th 2014 at 11:33 pm.
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Old Aug 27th 2014, 11:37 pm
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Default Re: E-2 and Business Vehicle Leasing

Originally Posted by Markstone492 View Post
Thanks Pulaski, always value your help and opinion.

It's really due to capital outlay. My thought is that if i can save $30k in the bank (at the start), rather than spend it on two cars, and have it there for a rainy day, ....., then that's my preference. ......
You do realise that you can lease vehicles as an individual, don't you?
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Old Aug 27th 2014, 11:55 pm
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Default Re: E-2 and Business Vehicle Leasing

Originally Posted by Pulaski View Post
You do realise that you can lease vehicles as an individual, don't you?
And sort it out before moving....but also personal finance on a car is easy to get.
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