FREQUENTLY ASKED QUESTIONS

Who can lease?

Any company, organization or association.  All leased equipment must be used for commercial purposes.

Who owns the equipment?

The leasing company, as the lessor, is the owner of the equipment.

Can the equipment be purchased at the end of the lease?

At the end of the lease term, the customer can either return the equipment to the leasing company, or purchase it for just $1.00.

Is a down payment required?

Typically the first and/or last lease payment will be payable at the time the lease begins.  This differs from a down payment in that the amount is typically much smaller and all payments that are made reduce the number of payments left to be paid.

How are lease payments determined?

The monthly payment is based on the term of the lease and cost of the equipment.  The initial term of the lease can run from 12 to 60 months. 

What factors are used to determine credit worthiness?

Type of business, length of time in business, bank and trade references, and D&B or other credit bureau ratings.  Financial statements may be required on transactions over $50,000.00.

Can the lease be cancelled?

Usually no, but equipment can be traded-in for new, leased equipment before expiration of the initial term.

Who should sign the lease?

The lease should be signed by an authorized officer of a corporation, by one of the partners of a partnership, or by the owner of a sole proprietorship.

Who services or maintains the equipment?

The customer is responsible for maintenance and receives the benefits of all “buyer” warranties.

What about insurance?

For the protection of both the leasing company, as owner, and the customers who need the equipment for their business operations, the equipment is required to be insured.

What effect does leasing have on the customer’s bank line of credit?

Established bank lines are unaffected and can be better maintained for day-to-day working capital needs.

Why lease?

There are a number of advantages that make leasing an attractive option for many firms.  These include the fact that leasing offers fixed regular payments, provides financing for 100% of the equipment cost, allows businesses to pay for equipment as it is used to generate income, conserves both working capital and lines of bank credit and may offer certain tax advantages.