Leasing your equipment can be a great option for your company when you need to expand or upgrade your equipment. While financing the lease can be done through the manufacturer or retailer, an equipment financing company many times is the best way to go. Not only are they more experienced in the process and make it easier, they many times have more flexibility when it comes to the terms.
As you start looking for equipment financing companies here are 5 things you should ask them:
What is the total costs including lease payments?
Because you are leasing equipment and only paying for the time you are using the equipment and not the total cost of the equipment, lease payments can be much lower per month than if you purchased it and financed it. Don’t let the lower cost prevent you from asking what the total costs will be. Make sure that you are on the same page for any and all costs. Find out about late payments, security deposits, surcharges and taxes. They could add up and although lease financing may be the right choice you should be aware of any unanticipated costs.
Are there any other costs that are not included in the lease?
Make sure that there are not any additional costs associated with the lease. Sometimes you may be responsible for any taxes, fees or surcharges. Make sure that you don’t have any maintenance, management or replacement charges. For example, if you are leasing vehicles are you responsible for tires, oil changes or cleaning.
What happens at the end of the lease?
Do you want an option to purchase and what would be the price? You might grow attached to the equipment and if it still might have a good life ahead it might be an option to buy it from the equipment finance company or you might want to extend the lease. Things to consider include the price, value of the equipment to base the price on and anticipated life of the equipment. It is much better to figure these items out at the beginning then at the end.
Can I Upgrade or Add Equipment?
You may find that you need to upgrade or add more equipment down the line and unless you have a master lease if you want to do this you will have to create and negotiate an additional contract or lease agreement. If you are thinking about upgrading or adding more equipment then you should look into a Master Lease.
What Do I Need To Do When I Return the Equipment?
Find out exactly what you need to do at the end of the lease. Do you need to drop the equipment off and walk away? Where do you drop it off at? Who is responsible for shipping or delivery? Do you need to return the owner’s manual? Do you need to bring in any records that you maintained the unit for any warranty issues? Make sure that you cover that when you negotiate the contract so you are not hit with any surprise charges at the end.