Equipment Leasing
Frequently Asked Questions

Leasing FAQs

What is the interest rate in a lease? ‘Lease Rates’ or ‘Lease Rate Factors’ are different from bank interest rates. Since you are leasing and not taking out a bank loan to finance your purchase, there is no interest rate. With leasing, you are paying to rent the equipment and the fixed monthly payment is based on the type of lease, term of the lease, cost of the equipment, time in business, financial repayment ability and your business and personal credit history.

How long does it take to get approved?
Most completed Applications are approved within 24 - 48 hours.

Does is cost anything to apply for a lease?
No. If you are asked by a leasing company to pay a significant, non-refundable fee upfront to see if you qualify for a lease – kindly hang up the phone.

What is a lease?
A lease is an agreement by you the customer (the lessee) to pay a fixed monthly rental payment for a specific amount of time for the right to use rental property owned by the lease company (the lessor). The customer is responsible for insurance, maintenance, and all other costs of ownership.

What is the difference between a lease and 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 the minimum equipment cost that can be leased?
Our minimum is $50,000 with no upper limit.

What happens at the end of the lease term?
That depends on the lease structure you have chosen. The majority of the leases we originate have clear end of term options. For transactions structured with a Fair Market Value purchase option, the buyout will be the fair market value of the equipment at lease end.

May I end my lease early?
Typically, NO. Most lease investment companies will require you to pay the total of the remaining lease payments. However, some will work with you and discount your remaining payments so you can get out early.

What are my options at the end of the lease?
The lessee/end user may purchase the equipment for its then fair market value (or such other amount if previously agreed to in writing), continue to lease the equipment, or return the equipment.

May the equipment be returned at any time?
No. The lease is a non-cancelable agreement for a specified term. Leases on commercial equipment are available for terms ranging from 12 to 84 months depending on equipment cost and type.

Are lease payments tax deductable?
Typically, on a Fair Market Value lease option, the IRS will allow you to write 100% of the lease payments off as an operating expense. We recommended that you consult with your tax advisor for the specific application to your business.

Are lease rates fixed or variable?
Lease rate factors & terms are fixed.

Can equipment be added to a lease at a later date?
Yes. Equipment add-on programs are available throughout the term of the lease.

Can I finance 100% of the purchase price?
Yes. Leasing only requires your first & last payment due at lease signing. Banks typically require 10-30% down.

Can installation & service costs be added to a lease?
Yes. Installation and service fees can typically be included in the lease as well as the maintenance contract.

Do I need to have insurance on lease equipment?
Yes. Insurance is required on all leased equipment. Insurance protection can sometimes be included with your lease for a nominal fee.

Do I save money on taxes with a lease?
Yes. Lease payments come from pre-tax dollars, not your after-tax profits. Tax-structured leases may allow you to write off the equipment at a faster rate. We advise you speak with your accountant for specific guidelines.

Does the equipment have to be new to be leased?
No! We can lease finance new & used equipment, but prefer assets 10 years old or newer.

How do I apply for a lease?
Go to our Application Page & follow our simple and easy approval process.

How does a lease qualify as an Operating Lease?
- Title to the leased assets may not automatically transfer to the lessee at any time during the lease term or subsequent to the lease term. - There is no provision for a bargain purchase option. - The lease is non-cancellable for its term and that term is less than 75% of the economic life of the leased asset. - The present value of the total or minimum required lease payments when discounted at the implicit interest rate in the lease is less than 90% of the leased asset's fair market value at inception.

How does inflation affect leasing?
Leasing lessens the impact of inflation, because your lease payments remain the same, no matter what happens to the value of the dollar.

How is my monthly payment calculated?
The monthly lease payment is determined by a Lease Rate Factor: a periodic rental payment to a lessor for the use of the asset. The Lease Rate Factor multiplied by the equipment cost determines the monthly lease payment.

How much of an initial investment is required?
Typically, two monthly payments, the first and the last months are required upon signing the lease agreement.

Who do I contact if I have questions during the term of my lease?
A leasing agent is always available during regular business hours by phone, fax or email.

What kinds of equipment can be leased?
We can finance most types of capital equipment, new or used, provided it qualifies as either revenue generating, essential use or cost saving in nature.

When does the lease start?
The lease starts when we receive acknowledgement that the equipment you ordered has been received by you and is in good working order.

Who can lease equipment?
Any company, organization or association and all municipal, state and government agencies can apply for leasing. We do not lease equipment to an individual for personal use.

Where do you geographically lease equipment?
We can finance equipment throughout the USA, all 50 states. On occassion we can offer international clients financing. We work with several business owners in the state of Texas.

Who is responsible for filing personal property tax returns and the annual payment of the tax?
The Lessee/end user is responsible for filing all property tax returns and remitting payment to the proper taxing authority. We will forward any property tax bills to the Lessee immediately upon receipt.

Who is responsible for the insurance and maintenance of the equipment?
The Lessee/end user is responsible for maintaining the equipment and providing the proper insurance. The lessee is responsible for insuring the equipment against risk of loss including property and casualty coverage and liability. Lessees typically just add the equipment to their existing policy, however, insurance may also be available through the lessor.

Who owns the leased equipment?
The Leasing Company, as the lessor, is the owner of the leased equipment until you choose to purchase the equipment at the end of the lease term.

Who services and maintains the equipment?
The lessee (equipment user) receives the benefit of the “buyer” warranties. The vendor or the original supplier of the equipment is solely responsible for any service or warranty issues. The cost of service contracts can typically be added to the lease.

Why should I lease versus pay cash for the equipment?
Check out the Lease vs. Buy Calculator. Suppose you take the cash you would use to purchase the equipment and re-invest it in your business. You could use it to advertise, purchase inventory, train or hire employees. Your return on investment would probably be around 20-25%. Is purchasing the equipment smart money management? Leasing saves after tax dollars and will not affect your Alternative Minimum Tax position with the IRS.

Who provides warranty coverage on the equipment?
We pass through all manufacturer warranty coverage to the lessee. Warranty claims are processed for the lessee in the same way they would be if the lessee were the owner of the equipment.

Why do you need my personal guarantee?
We know that you will be in business five years from now. By signing this industry standard personal guarantee you will be telling us you feel the same way. You will not be doing anything you have not been doing every day - committing yourself personally to support a business entity that you have built personally.

Will you finance the installation of my new equipment?
Yes. Installation and freight charges, as well as taxes, can be included into your lease and amortized over its life.

May non-equipment items such as software and maintenance be included?
Yes. One of the benefits of leasing is the ability to bundle a number of corporate equipment items into a lease including software, service and support costs. This allows a lessee to make one simple monthly payment for an entire system or equipment line.

Where can I learn more about certain leasing terms that I don’t understand?
Click on our Equipment Leasing Terms page to find definitions for the most common terms used in leasing.

Call Today @ 877-389-2468

Application - Equipment Leasing Frequently Asked Questions

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