Posts tagged: equipment lease

Take Equipment Lease Instead of Buying a New One

Handling a business is no easy task. If you want to start your own business, there are lots of things you must take into consideration like for example whether you will purchase or lease some equipment. When the operations of the business primarily depend on particular equipment, you need to weigh things and make a decision right away. What you’re going to do is to analyze the financial resources of the company. If the initial investment covers buying for brand new equipment, then it’s better to purchase on cash. But if there are financial constraints, you have an option for an equipment lease.

It is even advisable to go for leasing if you are operating under a highly technological environment. With the fast changing of technology, more effective and efficient equipment maybe out in the market for a matter of months or years. Actually, leasing is becoming popular among businessmen. In this way, there is no need for a huge cash outlay. The operations can go on smoothly by just paying for monthly rentals. However, before you go on leasing the necessary equipment, you need to remember some factors. One that is very important is the leasing company. In equipment lease, you are dealing here with your lessor and it’s nice to establish a good business relationship.

With the proliferation of various leasing companies in the market, scouting for a possible lessor is easy. You can ask around from your trusted friends of some reputable and established leasing companies. Or you can go for the most convenient way like searching on the internet. That’s why; look for a lessor whom you can trust. Second to consider is the terms and conditions of the lease. Before signing in the contract, you must understand first the terms pertaining to the equipment lease. The first thing to do is to choose what type of leasing you plan to avail. There are different types available like operating and finance lease.

When we talk about operating, your obligation is to pay your lessor a fixed monthly rent. On the other hand, finance lease is like purchasing equipment but on an installment basis. Eventually, when you have fully paid the agreed amount, there will be a transfer of ownership. In accounting terms, finance lease follows the principle of substance over form. It is considered as rent but in substance, it is actually a purchase. Another thing to understand in equipment lease is with regard to the charges. Sometimes, lessor attaches some additional charges on your monthly rental fee without you knowing it.

You must be aware of these things to avoid paying much. If ever your lessor explained the significance of the charges like penalties, commitment fess and the like, you can negotiate to eliminate or reduce some charges. You must also ask about renewal options in case you want an operating lease. So when the term has already expired but you want to continue, you may do so. Basically, leasing can be advantageous for some businesses. Monthly rentals will not be too much of a burden but can be affordable too. As a businessman, you must understand the nature of equipment lease and analyze on how it can be beneficial to the business.

Article Source: http://EzineArticles.com/?expert=Rick_Goldfeller http://EzineArticles.com/?Take-Equipment-Lease-Instead-of-Buying-a-New-One&id=2558723

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categories Equipment Leasing | truckFinance | August 10, 2009 | comments Comments (0)

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Top Ten Things to Know About Equipment Lease Contracts

 

Top Ten Things to Know About Equipment Lease Contracts
By [http://ezinearticles.com/?expert=George_Parker]George Parker
Equipment leasing helps thousands of U.S. companies to grow and boost their profits each year. Savvy business owners who benefit from leasing are aware of these top ten lease contract points:
? Binding Agreement. Equipment leases are legally binding contracts. Usually the leasing company will have very few obligations to fulfill. In contrast, your company will have several significant obligations, including proper equipment maintenance, insurance, payment of rents, and others. Read the contract carefully and/or go over it with your attorney.
? Interim Rent. This partial rent is due for the period between acceptance of the equipment by your firm and the lease start date. Many leases provide for a daily rent amount that is equal to the monthly amount divided by thirty. Beware that your firm will pay significant interim rent if equipment acceptance takes place early in the month and the lease starts the first day of the following month. To reduce this expense, you should negotiate the interim rent clause or schedule your equipment delivery and acceptance toward the end of the month.
? Triple Net Lease. Most leases are triple-net contracts. This means that the lessee is responsible for all insurance, maintenance, and taxes related to ownership or possession of the equipment. Taxes usually include property taxes and sales/use taxes. Insurance typically includes casualty and liability insurance in favor of the leasing company. Maintenance clauses usually require the lessee to maintain the equipment in good working order or up to a specified standard.
? Personal Guarantees. Some leases require personal guarantees of the lessee’s principals. Under most guarantees, the guarantors stand behind the lessee’s performance and obligations under the lease. In many cases, the guarantee gives the leasing company the right to bypass the courts and demand guarantor performance upon certain uncured contract defaults.
? Assignable Contract. Most leases give the leasing company the right to sell and/or assign the contract to another party at will. This clause is important because the leasing company may be required by its funding source to assign (or sometimes sell) the lease to receive financing. Some leases allow the lessee to assign its rights and responsibilities under the lease. This assignment usually does not relieve the lessee of its obligations, unless the leasing company grants the lessee such a release.
? Hell-or-High-Water lease. The vast majority of equipment leases require the lessee to perform its obligations under the lease without any right to off-set, hold back, counter-claim, or otherwise withhold payments due under the lease. If the lessee has a legitimate claim against the leasing company, it would have to pursue that claim separately in court or arbitration, as provided for in the lease.
? Payment Defaults. Most leases require that the lessee make lease payments on specified dates. While most leasing companies will allow some leeway in paying late and they are reluctant to issue default notices, defaults can trigger severe consequences. A payment default can initiate expensive legal proceedings and ultimately lead to repossession of the equipment. Avoid these hassles by making your company’s lease payments on time.
? Return of Equipment. Leases typically stipulate that the lessee must return the equipment in good condition, if the lessee does not purchase it at lease end. Leasing companies usually allow normal equipment wear and tear. Leasing companies can and often will charge for damaged or missing equipment, and missing parts.
? End-of-Lease options. Many leases allow the lessee to purchase the equipment for a bargain amount at lease end. Some leases do not. Rather, these leases may offer a variety of options, including: the right to purchase the equipment at fair market value; the right to return the equipment; the right to renew the lease for a specified period; the right to continue the lease on a month-to-month basis; the right to purchase the equipment at a stated price; and/or various other options. Make sure you read the lease carefully and that the lease has the desired end-of-lease options.
? Choice of Law. Typically, a leasing company will choose its state and/or county as the legal venue under which lease disputes get resolved. Therefore, a court or arbitrator in one of these jurisdictions will likely settle any contract disputes. If the location is a state other than where your company resides and a dispute arises, your company may have to hire legal counsel licensed to practice in that state.
When a leasing company presents you with a contract to sign, keep these top ten lease considerations in mind. While they highlight only a few lease considerations, they are among the most important.
George Parker is a twenty-five year industry leader, co-founder and Executive Vice President of Leasing Technologies International, Inc. (”LTI”). He is author of several articles and e-books, including “Using Venture Leasing As A Competitive Weapon” and “101 Equipment Leasing Tips”.
LTI provides superior financing solutions to emerging growth companies and venture capital-backed start-ups. Visit http://www.ltileasing.com/ to learn how LTI’s innovative equipment financing can help you get a jump on competitors.
Article Source: http://EzineArticles.com/?expert=George_Parker http://EzineArticles.com/?Top-Ten-Things-to-Know-About-Equipment-Lease-Contracts&id=1005491
Equipment leasing helps thousands of U.S. companies to grow and boost their profits each year. Savvy business owners who benefit from leasing are aware of these top ten lease contract points:
  1. Binding Agreement. Equipment leases are legally binding contracts. Usually the leasing company will have very few obligations to fulfill. In contrast, your company will have several significant obligations, including proper equipment maintenance, insurance, payment of rents, and others. Read the contract carefully and/or go over it with your attorney.
  2. Interim Rent. This partial rent is due for the period between acceptance of the equipment by your firm and the lease start date. Many leases provide for a daily rent amount that is equal to the monthly amount divided by thirty. Beware that your firm will pay significant interim rent if equipment acceptance takes place early in the month and the lease starts the first day of the following month. To reduce this expense, you should negotiate the interim rent clause or schedule your equipment delivery and acceptance toward the end of the month.
  3. Triple Net Lease. Most leases are triple-net contracts. This means that the lessee is responsible for all insurance, maintenance, and taxes related to ownership or possession of the equipment. Taxes usually include property taxes and sales/use taxes. Insurance typically includes casualty and liability insurance in favor of the leasing company. Maintenance clauses usually require the lessee to maintain the equipment in good working order or up to a specified standard.
  4. Personal Guarantees. Some leases require personal guarantees of the lessee’s principals. Under most guarantees, the guarantors stand behind the lessee’s performance and obligations under the lease. In many cases, the guarantee gives the leasing company the right to bypass the courts and demand guarantor performance upon certain uncured contract defaults.
  5. Assignable Contract. Most leases give the leasing company the right to sell and/or assign the contract to another party at will. This clause is important because the leasing company may be required by its funding source to assign (or sometimes sell) the lease to receive financing. Some leases allow the lessee to assign its rights and responsibilities under the lease. This assignment usually does not relieve the lessee of its obligations, unless the leasing company grants the lessee such a release.
 
  6. Hell-or-High-Water lease. The vast majority of equipment leases require the lessee to perform its obligations under the lease without any right to off-set, hold back, counter-claim, or otherwise withhold payments due under the lease. If the lessee has a legitimate claim against the leasing company, it would have to pursue that claim separately in court or arbitration, as provided for in the lease.
  7. Payment Defaults. Most leases require that the lessee make lease payments on specified dates. While most leasing companies will allow some leeway in paying late and they are reluctant to issue default notices, defaults can trigger severe consequences. A payment default can initiate expensive legal proceedings and ultimately lead to repossession of the equipment. Avoid these hassles by making your company’s lease payments on time.
  8. Return of Equipment. Leases typically stipulate that the lessee must return the equipment in good condition, if the lessee does not purchase it at lease end. Leasing companies usually allow normal equipment wear and tear. Leasing companies can and often will charge for damaged or missing equipment, and missing parts.
  9. End-of-Lease options. Many leases allow the lessee to purchase the equipment for a bargain amount at lease end. Some leases do not. Rather, these leases may offer a variety of options, including: the right to purchase the equipment at fair market value; the right to return the equipment; the right to renew the lease for a specified period; the right to continue the lease on a month-to-month basis; the right to purchase the equipment at a stated price; and/or various other options. Make sure you read the lease carefully and that the lease has the desired end-of-lease options.
  10. Choice of Law. Typically, a leasing company will choose its state and/or county as the legal venue under which lease disputes get resolved. Therefore, a court or arbitrator in one of these jurisdictions will likely settle any contract disputes. If the location is a state other than where your company resides and a dispute arises, your company may have to hire legal counsel licensed to practice in that state.
When a leasing company presents you with a contract to sign, keep these top ten lease considerations in mind. While they highlight only a few lease considerations, they are among the most important.
George Parker is a twenty-five year industry leader. He is author of several articles and e-books, including “Using Venture Leasing As A Competitive Weapon” and “101 Equipment Leasing Tips”.
Natloans provides superior financing solutions to emerging growth companies and venture capital-backed start-ups. Visit natloans.com.au to learn how natloans innovative equipment financing can help you get a jump on competitors.
By [http://ezinearticles.com/?expert=George_Parker]George Parker
Article Source: http://EzineArticles.com/?expert=George_Parker http://EzineArticles.com/?Top-Ten-Things-to-Know-About-Equipment-Lease-Contracts&id=1005491
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categories Equipment Finance, Equipment Leasing, Tips | truckFinance | June 22, 2009 | comments Comments (0)

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Finance Or Lease When You Need Medical Equipment

 

Finance Or Lease When You Need Medical Equipment
By [http://ezinearticles.com/?expert=J._Tom_Williams]J. Tom Williams
Healthcare facilities require lots of medical equipment. This is true of nursing homes, doctor offices, physician groups, hospitals and stand-alone clinics, to name a few. Today there are more options ever before for financing or leasing medical equipment. Understanding the differences and choosing the right financial vehicle instrument is critical to managing cash flow of the practice, maintaining the equipment, getting updated equipment, and disposing of it when no longer needed.
The major fork in the road for medical equipment is the choice between financing with loans or a program for medical equipment leasing.  Both options are available from lenders across the country.  Although both instruments achieve the goal of providing equipment to the medical practice there are some significant differences to consider. In particular a new form of financing – the Equipment Finance Agreement (EFA) – has gained popularity in the last few years.
An EFA is a loan document that takes the place of a loan agreement, note and security agreement. In essence it makes the lender the lien-holder and puts a security interest against the equipment. Once an EFA is completed, your business owns the equipment from day one.
A Lease is simply a contract conveying property to another for a specified period of time. In this contract your business acquires the use of, but does not own, the equipment in question. You usually will have the option to purchase the equipment at the end of term – or to return it to the provider.
You may want to have the option to purchase the asset, continue leasing it, or send it back at the end of the lease term. The $1.00 out lease is extremely popular with businesses in the United States. It allows a business to know it will be paying $1.00 at the end of the lease to transfer the asset from the leasing company to the business. This is especially popular with equipment that might lose value quickly or become obsolete such as computers. In the case when there is a residual associated with the lease it is generally considered a Fair Market Value Lease. Obviously, this option is not available in an EFA because you have already purchased the equipment.
Some lenders like the benefit of the EFA because it protects them from liability. For example, in vehicles or equipment that have inherit risk lenders have less legal exposure because they have no ownership in the asset and are merely a lien-holder on the asset. Some lenders are also more lenient in allowing prepaying the EFA as opposed to the lease since it is in fact a form of loan.
Remember the following facts about these agreements when making your decision. An EFA is a loan and a Lease is a rental that might have a purchase option.
Read the contract carefully before you sign. It should be very apparent which kind of contract you are in. One will say “Lease” and other will say “Finance”. If you know what you want ask your lender. By understanding the benefits of each structure your business can maximize profit and minimize your headache at the end of the contract especially in a lease. Make sure you understand the end of term options in advance and choose the agreement that suits the needs of your facility.
Tom Williams is President of [http://www.elease.com]eLease Equipment Leasing.  He was inducted into the Leasing Hall of Fame for his work pioneering the use of the world wide web to help entrepreneurs fund their businesses. 
He has a degree in Economics from Boston University. Tom writes regularly on his blog about [http://www.elease.com/3763/Medical-Equipment-Leasing.html]medical equipment leasing.
Article Source: http://EzineArticles.com/?expert=J._Tom_Williams http://EzineArticles.com/?Finance-Or-Lease-When-You-Need-Medical-Equipment&id=1840456

Healthcare facilities require lots of medical equipment. This is true of nursing homes, doctor offices, physician groups, hospitals and stand-alone clinics, to name a few. Today there are more options ever before for financing or leasing medical equipment. Understanding the differences and choosing the right financial vehicle instrument is critical to managing cash flow of the practice, maintaining the equipment, getting updated equipment, and disposing of it when no longer needed.

 

The major fork in the road for medical equipment is the choice between financing with loans or a program for medical equipment leasing.  Both options are available from lenders across the country.  Although both instruments achieve the goal of providing equipment to the medical practice there are some significant differences to consider. In particular a new form of financing – the Equipment Finance Agreement (EFA) – has gained popularity in the last few years.

 

An EFA is a loan document that takes the place of a loan agreement, note and security agreement. In essence it makes the lender the lien-holder and puts a security interest against the equipment. Once an EFA is completed, your business owns the equipment from day one.

 

A Lease is simply a contract conveying property to another for a specified period of time. In this contract your business acquires the use of, but does not own, the equipment in question. You usually will have the option to purchase the equipment at the end of term – or to return it to the provider.

 

You may want to have the option to purchase the asset, continue leasing it, or send it back at the end of the lease term. The $1.00 out lease is extremely popular with businesses in the United States. It allows a business to know it will be paying $1.00 at the end of the lease to transfer the asset from the leasing company to the business. This is especially popular with equipment that might lose value quickly or become obsolete such as computers. In the case when there is a residual associated with the lease it is generally considered a Fair Market Value Lease. Obviously, this option is not available in an EFA because you have already purchased the equipment.

 

Some lenders like the benefit of the EFA because it protects them from liability. For example, in vehicles or equipment that have inherit risk lenders have less legal exposure because they have no ownership in the asset and are merely a lien-holder on the asset. Some lenders are also more lenient in allowing prepaying the EFA as opposed to the lease since it is in fact a form of loan.

 

Remember the following facts about these agreements when making your decision. An EFA is a loan and a Lease is a rental that might have a purchase option.

 

Read the contract carefully before you sign. It should be very apparent which kind of contract you are in. One will say “Lease” and other will say “Finance”. If you know what you want ask your lender. By understanding the benefits of each structure your business can maximize profit and minimize your headache at the end of the contract especially in a lease. Make sure you understand the end of term options in advance and choose the agreement that suits the needs of your facility.

 

 Equipment Leasing Finance

By [http://ezinearticles.com/?expert=J._Tom_Williams]J. Tom Williams

Article Source: http://EzineArticles.com/?expert=J._Tom_Williams http://EzineArticles.com/?Finance-Or-Lease-When-You-Need-Medical-Equipment&id=1840456

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categories Equipment Finance, Equipment Leasing | truckFinance | | comments Comments (0)

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