According to the National Association of Equipment Leasing Brokers (http://www.naelb.org/), eight out of ten companies in the US lease some or all their equipment. There are definite advantages in leasing business equipment and with the right leasing partner, a business owner will surely enjoy the benefits.
Are you ready to acquire a lease? If yes, consider the following equipment lease tips on how you can make the most out of leasing:
1. Start with the right leasing partner. There are many companies in the market that offer different types of lease services. The quality of service may not be the same for all so it’s important to do some research, and check the lessor’s background and reputation. It’s best to choose a company with proven experience in the leasing trade.
2. Choose a program that fits your business. Before signing up for a lease, it’s important to choose a program that’s right for your business. Business equipment lease financing can be categorized in two basic programs: finance and operating leases.
A finance lease or a capital lease gives the lessee the option to own the equipment when the lease term ends. This type of lease is recommended for equipment that does not become obsolete and will be used for a long term.
On the other hand, an operating lease or service lease are ideal for types of equipment that needs to be replaced or upgraded after a short term period. When the lease term ends, the lessee can simply return the equipment to the leasing company without further obligations.
3. Check the prerequisites. The specific requirements may vary from one leasing company to another. The list of requirements may also depend on the business you own and the lease program you are applying for. For example, if you own a new or start-up business, you should look for a program especially created for your business type and see if you meet the lessor’s criteria of eligibility.
4. Start with a short term lease. A short term lease is recommended because it gives the lessee the opportunity to decide the next course action, depending on the business’s demands. A short term lease period is especially advisable for a first-time lessee. At the end of your lease term, you may choose to return the equipment, or renew another term with the same company.
5. Ensure business credit reporting. Does the leasing company report to a business credit bureau like Dun & Bradstreet? Acquiring an equipment lease is also a good way to build up your business credit history and credit score but if your lessor does not report to the bureaus, D&B will not be able to monitor your payments. Of course, you should strictly submit your monthly lease payments on time to build and maintain a solid business credit standing.
6. Read the fine print. Spend time reading each and every statement of your equipment lease contract. You should be aware of the exact fees you will be subjected to, particularly with regards to possible penalty charges such as late fees and lease termination penalty. Understand the lessor’s terms with specific situations. You should be well aware of your options when the lease term expires.
Other Related Articles:
The New Business Owner’s Guide to Equipment Leasing
Pointers About Small Business Equipment Leasing
About the author:
Lai Castillo is an equipment leasing broker that specializes in getting start up equipment leasing and providing articles in finding solutions for Leasefunders.com. For equipment lease application visit leasefunders.com.