Equipment Lease is fairly much like leasing an automobile meaning that you are essentially “renting” the equipment. Generally, you’ll pay a flat monthly fee for an equipment leasing company to make use of the equipment for a prolonged period of time. However, the ownership remains within the equipment leasing company’s name. Oftentimes, a purchase choice is available at the end of contract of the lease to be able to acquire ownership of the equipment.
Here are some basic steps on how to lease equipment:
1. Take a look at equipment invest in. Before selecting an equipment leasing company, it is essential that you know what type of equipment you want to lease such as the make and model. It is also helpful in the event you come prepared using a quote from the equipment vendor because equipment leasing companies will often require this when submitting a deal. Furthermore, manage to explain why you need the equipment along with what you plan for doing things for. This information will help the equipment leasing company determine if you qualify for financing.
2. Study equipment leasing companies. Each and every leasing company will need an application to discover more information regarding your business practices and credit history of guarantors. Each clients are different so be sure to do substantial research to choose the best one to adhere to your company. In most cases, you will need to supply the names of all of the owners/guarantors, their social security numbers, organization history, a federal tax I D, and basic contact information. When you have gathered all of this info you will be ready to apply.
3. Apply. After performing all your research and putting together basic information, you will be prepared to sign up for leasing and funding. Some businesses come with an online application and others need you to fax or e-mail it in. The application process is generally pretty fast and some companies react to you the exact same day are applying. Make sure to include your SSN in your application so the equipment leasing clients are capable to pull your credit report; if you decline to do so you application cannot be processed. Additionally, larger ticket items will most likely require more time to process, so be patient when waiting to hear back about the lease.
4. Select a term. If you are approved for financing, you will have to pick a term for leasing. Generally, leasing terms fall between two and four years. There are certainly other options available although two to four year terms will be the easiest to acquire. Different types of equipment will need various lease structures, so put together to be flexible whenever using your leasing company. The longer the term, the smaller the payment. Be sure to pick a term that works well in line with your company’s income which means you do not have to allocate all of your resources in one location.
You will find three regular end-of-term options:
1. Fair Market Value (FMV): Get your equipment at the fair market value price at the conclusion of the lease.
2. 10% Purchase: Purchase your equipment for 10% of the buy cost with the termination of your lease.
3. $1 Buyout: Purchase your equipment by the end of the lease for $1.
5. Sign the lease. A final step is to sign your lease contract and commence the lease. After completing all of the preceding steps, very carefully review each lease report and sign the lease. If you have questions or worries with regards to anything pertaining to your own lease or equipment, do not hesitate to your own equipment leasing skilled.