Equipment Lease Financing Tips to Remember

Posted on | August 16, 2010 | No Comments

Whether you are a new business, a start-up business or an established business seeking equipment lease financing, following the tips listed below will make things easier for you and save you from unnecessary problems later on.

Consider your qualifications. Not all leasing companies provide services for all kinds of businesses. Some lessors only deal with established businesses while other lessors may offer lease programs for new businesses. Some lessors may strictly require good credit history and you can also find lessors who have more lenient standards that accept customers with bad credit.

Some leasing companies also have restrictions on types of equipment they will finance. Usually these are considered “high risk equipment”. Examples of this type of equipment include restaurant equipment, vending machines, and ATM machine routes. It’s a good rule of thumb to call the leasing company you want to work with and make sure they finance your type of equipment you want to lease.

It’s very important to consider your qualifications as a business before submitting your lease application to prospective lessor. Why so? This is to prevent unnecessary rejections which can inflict damage to your credit history. Keep in mind that each time you submit a lease application, the lease company will check your credit report and all inquiries will be reflected in your file.

Negotiate for a buyout. When the lease term ends, the lessee has the option to return the equipment to the leasing company or negotiate a buyout. Many companies that plan on keeping the equipment after the lease term ends negotiate a $1 buyout at the end of their term.

Watch the expiration date. See to it that you will remember the exact expiry dates of leases. Perhaps you can place a note on your bulletin board where you can always see it or set a reminder using smart phone or organizer. This way, you can plan your next action before the lease expiry date and avoid unnecessary penalties or delays.

Choose a lease program suitable with your needs. As we’ve said, leasing companies offer several lease programs to match the demands of different businesses, depending on their size and financial capacity. You can get an overview of the available lease programs by checking out the lease company’s website or by checking out lease broker sites.

Read the fine print. No matter how long or how many pages the contract is, make sure that you will not miss a single detail in your equipment lease agreement. Carefully study the lessor’s policy particularly with regards to fees, special situations (ex. early lease termination), and modifications to the terms you initially signed up for.

Lai Castillo is an equipment lease financing broker that specializes in several lease programs.

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Equipment Lease Financing Tips to Remember

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