Why a lease purchase can be a great opportunity!

I see many posts stating that lease purchase programs are a total rip off and every driver should avoid it at all cost. I beg to differ in the lease purchase discussion simply because of the hidden opportunity of being able to leverage a lease program to actually becoming a true owner operator meaning you really own the truck.

Let me say this first no you will not make nearly as much as a true owner operator but allow me to explain how I am using a lease purchase as leverage to get the capital needed to buy a truck myself.

First things first is when signing my tractor lease I signed up using a business name with an ein number. There's a good reason for this the ein number is similar to a social security number and what does a social security number attached to it??? Your credit score. So as opposed to running it through my social it shows that all revenue is circulating through a business entity.

Here's the kicker at the end of the year I will receive a 1099 misc for my trucking company showing the gross income my company produced for the year. At the end of the year my company will have grossed around 120k. Did I actually get to see that money? Nope but that doesn't matter. All lenders want to see is that your business has produced x amount of dollars. I paid a company $1500 for business credit counseling and after 6 months will have enough business credit to recieve a line of credit. With the right business credit score you can have a line of credit for 3 times your gross and as I stated before the gross is the total revenue the truck produced. So at 120k for the year that will give me an opportunity to receive a 360k line of credit.

A line of credit is not money in hand but money available when needed for a business expense so let's say you just decide to pull out 10k and put it down on a used truck. With another 350k available you will have no worries if something major happens to your truck. So with that being said I have to say a lease purchase program can be good if used the right way. I've been a lease operator for 10 months and when I originally started did not see the hidden opportunity. It's been almost a year of ups and downs but you can make it work but if you want to become a true owner operator look at the bigger picture.
And I'm sure many people will say "there's no way you can make it under a lease for a whole year" well if me taking home on average about 900 a week after expenses and having just received my cdl less than a year ago is not making it then I can't wait to see what making it looks like.

 

Which numbers don't add up is it the 120 times 3 or...if your saying the yearly gross at 120k you have to understand the difference between gross and profit. The profit will be on average 900 a week but my gross is anywhere between 2500 and 3500 a week ... so elaborate where the numbers don't add up

 

Got me

 

The key for me is not to pay the truck off but to have a 1099 statement for my trucking business that's shows real revenue. what lenders want to see is if you can actually generate revenue into your business and what a lease purchase allows you to do is get your feet wet and understand the true cost of operating a truck and also generate revenue but not have the burden of a truck that's financed. No you won't get rich but if you can weather the storm of the ups and downs that come along with a lease purchase you can use that to secure real financing.