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ARMONK, NY - 14 Feb 2008: IBM Global Financing (IGF), the technology lending and leasing business segment of IBM (NYSE: IBM) today announced that it will pass along some of the benefits IBM receives under the new US economic stimulus package, signed into law Wednesday by the President, to U.S. businesses looking to access technology equipment in 2008.
Under the new Economic Stimulus Advantage Offering developed by IBM, clients will benefit from new low rate and no charge deferral offerings on the acquisition of technology equipment needed to maintain their business competitiveness and achieve new business innovation. Clients can receive either enhanced rates or a free 3-month deferral on leases of IBM and non-IBM equipment installed by 2008. In leasing arrangements, the lessor traditionally holds title to the equipment and therefore largely reaps the benefits afforded under this law.
"IBM wants to be sure that our clients have the funding they need to support business innovation and growth in these uncertain times," said John Callies, general manager of IGF. "The new law gives IBM an opportunity to pass through further bonus savings to our customers looking to access new technology to deliver on their business objectives."
Yesterday, President Bush signed into law the U.S. Economic Stimulus Package. In addition to the tax benefits for individuals, the law will have an extremely favorable impact for businesses challenged to fund their strategic technology business investments in an uncertain economy. The new law includes a bonus depreciation provision available for all businesses on new equipment and software placed in service in 2008. Large and small businesses can expense up to 50% of the value of capital goods placed into service this year, while certain small businesses may have the ability to nearly double the amount they immediately write-off during 2008.
The President's approval of the economic stimulus bill also represents an opportunity for U.S. customers to take advantage of IBM's Asset Recovery Solutions. Under this program, IBM can manage the buyback and disposal of excess or existing technology, replacing it with new technology in order to potentially benefit from the enhanced lease and financing terms in the Economic Stimulus Advantage Offer.
Under the new U.S. Economic Stimulus Package, signed into law by the President today, business will benefit from:
This provision in effect doubles the benefits of an existing tax write-off for small businesses. Businesses, whose total 2008 capital expenditures from all vendors are $800K or less, will be permitted to immediately deduct up to $250K of purchases in 2008 and depreciate the balance over the life of the asset (5 years for computers, 3 years for eligible software). The $250K deduction is reduced as the amount of expenses exceeds $800K and is totally eliminated at $1.05M. Under prior law, the maximum current deduction was $128K with reductions beginning at $510K.
The new Economic Stimulus Offering by IBM will afford U.S. customers leasing new equipment in 2008 savings via one of two options:
IBM and IBM Credit LLC do not, nor intend to, offer or provide tax or accounting advice to customers. Customers should consult with their own financial and legal advisors. Any tax or accounting treatment decisions made by or on behalf of the customer are the sole responsibility of the customer.
About IBM Global Financing
IBM Global Financing (IGF), the financing business segment of IBM and the world's premier single-source provider for multi-vendor IT financing solutions, serves commercial clients ranging from small businesses to the majority of the Fortune 100. With assets of $34 billion worldwide, IGF provides project financing, commercial financing and asset-recovery services to 125,000 clients in more than 50 countries. Additional information can be found at http://www-03.ibm.com/financing
Hardware leasing, software and services financing, commercial financing, inventory, accounts receivable, term loans, acquisition financing