Frequently Asked Leasing Questions

WHAT IS A LEASE – A contract where one party (the lessor) gives another party (the lessee) the exclusive right to use and possess its equipment for a specific period of time in exchange for lease payments.
WHO ARE THE PARTIES TO A LEASE –The parties are:

• The lessee -- the business owner that will lease the equipment.
• The vendor -- the seller of the equipment.
• The referral source -- you, the person who contacts the customer and initiates the lease.
• The lessor -- the company that funds the lease and collects payments from the lessee.

WHO LEASES – 80% of all businesses lease some or all of their equipment.

WHAT TYPES OF BUSINESSES CAN LEASE – Any business entities including sole proprietorship, partnership, farmer, corporation or limited liability corporation (LLC).

WHAT CAN BE LEASED – New or used equipment needed to operate a business or used to produce income.

WHAT ARE THE BENEFITS OF LEASING – A lease can provide 100% financing. Equipment costs, software, delivery, installation, and maintenance can be included in a lease. A one-page credit application can provide up to $75,000 in lease equipment. Lease payments are often fully deductible as an operating expense. Leases free up lines of credit to allow businesses to acquire equipment immediately.

WHY NOT TAKE OUT A BANK LOAN – Banks generally require an equity down payment of up to 25% of equipment cost. Banks will secure all assets of a company as collateral for the loan.  Our Leasing company only files liens on the equipment, not all the assets. Financial statements are required for all bank loans, in addition to the credit application. Our  Leasing company only requires a one-page credit application. Often, it can take up to two weeks for a bank to approve a loan request, but we will typically  get a lease approval  in 24 hours.

WHAT IS THE TERM OF A LEASE – Leases can be written for 12 to 60 months.

WHO OWNS THE EQUIPMENT AT LEASE END – Most leases are written so that the customer owns the equipment at lease end. This lease option is known as a $1.00-out lease. However, the lessee may choose a fair market value (FMV) option buy-out, usually 10% of the original equipment cost. Under this option, the monthly payments are less but the lessee must pay the fair market value of the equipment at lease end to own, or they must return the equipment to the leasing company.


HOW LONG IS THE APPROVAL PROCESS – Our Leasing Company can give you a 24-hour turn around from receipt of completed credit application to approval of lease in most cases up to $75,000.