The Benefits of Leasing

• Lower payments – can help you bring revenue and expenses into closer alignment.

• Fixed payments - helps you forecast future expenses more accurately and improve your budgeting process.

Application Process

• After the lease is filled out – the approval process can take anywhere between 5 minutes to 3 or 4 days.  This completely depends on the leasing company used and the information provided.

• After the lease is approved – the machine will be delivered and the lease will need to be signed and sent back to the leasing company.

Payment Options

• Generally there is no deposit required at the start of a lease.

• In some cases a leasing company will ask for the first months rent.

• They also may ask for a Personal Guarantee.  They generally do this with smaller businesses.  They tend to think smaller businesses have payment practices similar to those of their principals.

• You will be able to choose how many months you would like to spread your payment over (12-60 months).

• You must also decide what type of lease you would like.  Here are the options and their descriptions;

  1. Fair Market Value – You can purchase the equipment at the end of the lease for its fair market value-the price at which the equipment you’ve lease would be sold by a willing seller and purchased by a willing buyer.

  2. Dollar Buyout – You can purchase the equipment at the end of the lease for $1.00.  Theses lease have higher monthly payments than fair market value leases.

  3. 10% Buyout – You can purchase the equipment for 10% of purchase price at the end of the lease.  Really takes the mystery out of end of lease cost.  These payments are in between a FMV lease and a $1.00 buyout.

Your First Bill

• Leasing companies generally do not charge an application fee. They DO however charge a documentation fee.  This fee can range between $50 - $75.00.  This is billed with your first lease payment.

• Also on your first bill you will be charged interim rent.  This is the rent for the period of time the leasing company has paid your equipment supplier and your first payment is due.

Insurance

• Since the leasing company owns the equipment and the lease is for its use, the leasing company must ensure that if the equipment is destroyed or stolen, their lease will be paid off from the proceeds of the insurance policy. **Most commercial polices cover leased equipment; all you need to do is have your insurance agent forward the leasing company an endorsement at no cost to you.  (If you do not get the insurance endorsement to the leasing company at the signing – they will bill your for insurance coverage on your first bill.  Just send them a copy and they will remove the charge.)

Taxes

• Taxes are NOT included in your base monthly payment.  Taxes are added by the leasing company and are billed with your payments.

End Of Lease

• 90 days before your lease ends call your supplier.

• Your supplier will give you a letter to fire off to the leasing company based on what you are planning on doing.

• You have the following options;

  1. You can return the equipment to the leasing company.

  2. Your can purchase the equipment form the leasing company.  (Please let your supplier help you with this. They are able to get a much better deal then you would.)

  3. You can continue to lease the equipment on a month-to-month basis.

  4. You can upgrade the equipment.  (Again, very important you speak with your supplier.  We deal with leasing companies for a living.  We know how to get you the most for your money.)