Commercial Equipment Lease
6 Tips For Getting The Best Commercial Equipment Lease
How To Get The Right Equipment Lease Financing Deal
Equipment lease financing is very beneficial
to businesses, especially to those who are in a financially tight position and to those who operate in a rapidly changing technological environment. In leasing, business organizations won’t have to purchase the business critical equipment, they just need to pay a monthly rental fee to the leasing firm to use it.
All types of equipment from major manufacturing equipment to smaller items, such as computers, can be leased from lenders like banks, finance companies, bona fide business equipment/office equipment leasing companies, equipment manufacturers or retailers.
Tips for getting the right deal
1) Find the Right Leasing Partner
As you will be dealing with the leasing company for a long time and it is the question of your business critical assets, take great care in choosing the right leasing firm. This way you will be able to save time and avoid later problems because of a substandard lease. Look for a business equipment or office equipment leasing company who are experienced, have good reputation, are in good financial shape, and have a relationship approach to the business.
2) Choose the Right Lease
When choosing the right lease give utmost attention to details like lease pricing, lease flexibility, balance sheet considerations, equipment obsolescence, the anticipated period of equipment usage and your firm’s credit status. This analysis will help you arrive at the right decision with regard to the type of lease most beneficial to your business and finances. The lease types you can choose from are a capital lease, finance lease or operating lease.
3) Opt for short End-of-lease Notice and Renewal Periods
Usually the notice period ranges from one to six months. And if proper notice is not served, automatic renewal kicks in which can last from one month to 6 months. You can opt for short notice and automatic renewal periods to avoid paying unintended lease charges.
4) Minimize Interim Rent
Interim rent is the amount paid to the leasing firm for using the equipment between the equipment acceptance and lease start dates. You can opt for delivery and acceptance towards the end of the month as the first day of the month is usually the official start day for leasing firms. In case you fail to do so, you can request a limit on interim rent.
5) Make sure that Lease Term and Projected Equipment Use match
This is important because your lease might run out before your project is over resulting in extra expenses and disruption in work or idle leased equipment for which you have to keep paying. This might also result in premature surrender of the lease which itself will attract penalties. So be very careful in determining your requirements and the expected period of use when deciding the lease period.
6) Identify and Understand All Potential Fees
Leasing proposals are replete with a myriad of fees and penalties such as commitment fees; non-use fees or facility fees, per schedule documentation charges, attorney fees, penalty charges for late rental payments, early lease termination charges etc. You can save a significant amount of money if you can prove yourself to be a good potential customer on the basis of your financial position, market position etc. So understand all the inherent fees and charges and negotiate hard. Remember that if you are a strong candidate there are numerous small business equipment leasing companies in the market.
By: Stephanie Iles
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Equipment Lease
This is a standard straightforward lease form. Be sure to file the appropriate local, county, and state liens (UCC forms) against the equipment within the locals.
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Stephanie Iles is a writer on business and finance. She specializes in writing on equipment lease financing, commercial mortgages and various other loan options. Her write-ups highlight the different aspects of www.assetfinancebroker.co.uk /equipment-leasing-company.php>office equipment leasing.
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Small Business Equipment Lease
Small businesses and new businesses often find it very difficult to obtain financing. Private loans are not easily qualified for, and federal loans have precise requirements not easily met and are not widely available.
When it comes to financing new equipment, leasing can be the solution.
Leasing Explained
Leasing consists of obtaining an asset which remains the property of the lender but can be used by the borrower. The contract lasts for a certain period of time at the end of which the borrower has the option to buy the asset by paying a lump sum (usually a small percentage of the asset’s value). If he chooses not to do so, the contract ends or it can be renewed by replacing the leased asset with a new one. It’s widely used for cars and business equipment.
Benefits of Leasing Equipment
Leasing equipment has many benefits; it combines the advantages of renting equipment with those of possession by means of loan financing. Furthermore, the main advantage leasing provides is flexibility. Due to its mixed nature, most terms are subject to negotiation.
No Money Down
When buying equipment you need either to put money down or request a loan in order to purchase the equipment. When you lease, you pay monthly installments and get immediate tenure. It is just like if you were renting the equipment only you’ll be able to acquire it if you want to at a later occasion.
Tax Benefits
When you purchase equipment, it adds up to your taxable assets. If you requested a loan in order to pay for it, you can deduct the costs, but the equipment remains your property. When Leasing, you only hold possession of the equipment, it remains property of the lender and thus, you can deduct the monthly payments and it will not add up to your taxable assets.
Flexibility
If the equipment becomes obsolete, you can always request it to be replaced with a new one. Thus, you won’t suffer the consequences of obsolescence. You can have up to date equipment just by paying a monthly fee for it. Once you have no more use of it, disposing of it becomes the lender’s problem and not yours.
Given all the technological changes that occur everyday, chances are that you will make an excellent use of this leasing characteristic. When it comes to starting businesses and businesses in the technological field or technology dependent, leasing is definitely the best financial alternative.
Fast Approval
Since the asset remains property of the lender, leasing doesn’t have many requirements. The contract usually includes insurance policies attached to it so the lender get’s rid of certain risks related to the equipment and concentrates on its concern (financing).
Nevertheless a good credit history contributes a lot to getting a good deal on a leasing transaction. Bad Credit can increase the costs of leasing operations and since leasing is not the cheapest financial option, if you have really bad credit, it might be wise to consider other alternatives first.
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| Mary Wise, a professional consultant at http://www.badcreditloanservices.com with twenty years in the financial field, prevents consumers from falling into the hands of fraudulent lenders. In her website you will find more useful tips and interesting financial articles on this and many other related topics. By Mary Wise |
The Benefits Of Equipment Leasing
However you are confronted with the question of whether to buy a brand new one or just opt for equipment leasing?
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