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How is a lease different from a loan?
A lease is an agreement to make payments for a specific amount of time for the right to use the equipment owned by the lease company.
What is required to qualify for a lease?
A simple, one page application is usually all that's needed. Financial information will be required for leases over $75,000.
How long for an approval?
Approvals are usually accomplished within 2 hours, depending on the size of the transaction and all submitted information is correct and complete.
How much of an initial investment is required?
Usually, two security deposits based upon the monthly payments are required.
What is the minimum dollar value that can be leased?
The minimum required is $1,000.
Can service fees be added?
Yes. Installation and service fees can be included to the lease as well as the first year maintenance contract.
What about adding software?
Yes. Software and other soft costs can be added to the lease. Software only leases are available at special rates.
What about adding equipment at a later date?
Yes. Simple add-on programs are available throughout the term off the lease.
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Are all leases the same?
No. There are four lease purchase options available to choose from: - Capital Lease - Type of lease classified and accounted for by a lessee as a purchase and by the lessor as a sale or financing, if it meets any one of the following criteria: (a) the lessor transfers ownership to the lessee at the end of the lease term; (b) the lease contains an option to purchase the asset at a bargain price; (c) the lease term is equal to 75 percent or more of the estimated economic life of the property (exceptions for used property leased toward the end of its useful life); or (d) the present value of minimum lease rental payments is equal to 90 percent or more of the fair market value of the leased asset less related investment tax credits retained by the lessor.
- Finance Lease - A finance lease is a full-payout, non-cancelable agreement, in which the lessee is responsible for maintenance, taxes and insurance.
- Master Line of Credit - Also referred to as a master lease, it is a contract where the lessee leases currently needed assets and is able to acquire other assets under the same basic terms and conditions without negotiating a new contract.
- Operating Lease - Any lease that is not a capital lease. These are generally used for short-term leases of equipment. The lessee can acquire the use of equipment for just a fraction of the useful life of the asset. Additional services such as maintenance and insurance may be provided by the lessor. Payments under this type of lease structure are treated as rental payments and therefore are 100% tax deductible operating expenses. Typically the lessee returns the equipment at the end of the lease term or may have the option to purchase the equipment at fair market value.
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