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 Frequently Asked Questions
What is a lease? A lease is simply an agreement by a customer (Lessee) to make a monthly payment for a specific amount of time for the right to use property owned by Lessor (funding source). The Lessee is responsible for insurance, maintenance, and all other cost of ownership. At the end of the lease there are equipment purchase options available (see explanation of options below). Why should I lease? Leasing offers many advantages over any other type of financing. Leasing will not deplete financial resources like paying cash. Leasing offers 100% finacing unlike a bank loan that will usually require a 20% down payment. There are also tax benefits to leasing that will save you money. Leasing allows most businesses the opportunity to acquire revenue generating equipment and match cash inflows and outflows, essentially letting the equipment pay for itself. How is leasing different from renting? While there are serveral difference between leasing and renting, leasing gives you the added flexibility by giving you the option to purchase the equipment, return it or renew the lease. Who can lease? Any new or established company. What is required to qualify for a lease? An easy one page application is usually all that is needed for leases up to $250,000. Additional financial information may be required. How long is the approval process? Approvals are usually accomplished in less than 24-hours hours, depending on the size of the transaction and that accuracy of the information provided. How much of an inital cash outlay is required? Usually, 1st and last month's payment and a document processing fee. Are there any purchase options at the end of the lease? Yes, there are two purchase options $1.00 Buy-Out Option Plan For those who are fairly certain they wish to purchase the equipment at the end of the lease term, this is the recommended plan. At the end of the lease term, the equipment is simply purchased for $1.00. 10% Purchase Option Plan This plan offers the lessee a fixed purchase option at the end of the lease. At the lease end, the customer can extend the term of the lease, return the equipment or buy it at 10% of the original equipment cost. What equipment can be leased? All new and pre-owned equipment, software, installation and delivery charges, tooling and training. Peripheral equipment can be included (i.e. dust collection systems). In addition a prepaid maitenance service contract can be included. Later, trade-up equipment can be incorporated through lease add-on features. When do my lease payments begin? Once you have received all of the equipment you ordered and it has been properly installed, you execute delivery and acceptance certificate and you receive a bill for your first lease payment in 30 days, you will be invoiced thereafter. Are there tax advantages to leasing? Leasing provides a more rapid write-off because the lease term is shorter than the depreciable life of the equipment, and the monthly payments are often 100% tax deductible as a pre-tax business expense. Consult your tax advisor for more detailed information. |
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