Equipment Leasing - Things To Bear In Mind

 By: Mary C Wise
It is very common nowadays for companies to make lease contracts regarding their equipment instead of buying it first hand. If the business flourishes and makes profit, they will have the option to buy such equipment after the loan comes to an end. As you can see, equipment leasing works very much like car leasing. There are many advantages to equipment leasing, but we are not here to discuss them. In this article you will find the basic points to keep in mind regarding equipment lease contracts.

Number 1: Your Obligations Vs. The Leaser's Obligations

As beneficial as equipment leasing might be, you have to know that you will have much more obligations than your counterpart. Once they have signed the contract, the responsibility is all yours to carry. Apart from paying the lease contract on a monthly basis, you will have to ensure the proper care of the machinery, you might even have to pay insurance fees, rental fees, among others. Make sure you will be able to handle the pressure before signing the contract.

Number 2: Security

Some leasing companies might demand some personal guarantee from you (the lessee). You might need to have a co-signer who will answer for you in case you default on the lease contract.

Number 3: Lease Contracts Are Triple-Net Contracts

What does this mean? This means that the consumer is in charge of equipment maintenance, insurance (liability and casualty insurance) and taxes (use and property taxes) associated to it. In other words, the real owner will not pay a dime as long as you are leasing the machinery.

Number 4: Hell-Or-High-Water Clause

This clause will appear on the lease contract, and it means that the lessee has the obligation to pay rent for the entire life of the lease despite any external event affecting either the equipment involved or the lease contract itself. Any claims against the leasing company must be taken separately to court.

Number 5: Defaults On Payments

Most leasing companies are very tolerant when it comes to payment dates, they know how hard it can be to get a new business off the ground, or how tough it is to keep up when your economy is not going through its best time. But as understanding as they might be, you should not abuse their trust. Tolerating slightly late payments is one thing, bearing with complete default is another. Full default on your lease payments might lead to extremely expensive legal battles you will not want to fight. Keeping up might be hard, but it is for the best.

Number 6: When The Lease Ends

When the lease contract comes to an end, you might face a variety of options regarding the equipment. Some leasers will allow you to buy the equipment at a bargain price, others will prefer a fair market value, and others will not let you buy the equipment at all. You might be able to renew the lease contract or to simply return the equipment and move on.

If it is your choice to fully terminate the contract and return the machinery, keep in mind that you will be charged penalty fees if it is not in good condition and out of working order.
loading...
Author:
Artice Source: http://www.articlesphere.com

Related Articles in Leasing


People interested in the above article are also interested in the related articles listed below:

IndustrialLink tracks thousands of Fort Worth industrial properties available for lease on a monthly basis to provide accurate and informative data on the Fort Worth industrial space market. IndustrialLink tracks properties 10,000 sf and larger and provides free access to search by dozens of fields.
Fast development today has made us to overlook the basic needs that human being possess. Food, shelter and clothes used to be the essential requirements of human that were given the top priority. Our outlook towards things have changed. Shelter or housing is among them. Considering the high rates today, in future, it will be more difficult to buy houses. Therefore, the best option that is being chosen by today's generation is obtaining the house on lease.
Most of the people would have information about a lease purchase agreement. A lease purchase agreement is when a house is leased out to a tenant by the owner, and at the end of that lease, the tenant will have the option to buy the home if they want too . In an option that is given to a tenant to lie in the house that has to be paid in full is called "leasing to own". This type of agreement benefits those that are unable to get a mortgage agreement and don't have the funds to put a down payment on a property that they want to buy.

More in Leasing

Excellent, Larry. Thank you for taking the new article directory technology and making it work to the max. I encourage everyone to keep contributing and contributing regularly. I can attest to the fact that this site is already a strong directory in a field of many. Kudos to Larry!

Matthew C. Keegan
The Article Writer

 

I find it a delight to use both as an author and a publisher. It is full of nice little surprises that make the whole process of writing, reading and publishing articles a complete delight. This is one that comes out tops and beats the rest hands down.

Eric Garner
Managing Director
ManageTrainLearn

 

I did a Google search and came across your site. It was exactly what I was looking for and was elated to find such a broad range of articles. As I am launching a free magazine in a small town in Florida, I wanted to be as resourceful as possible while still being able to provide some content that is interesting and well written. Your site has all the variables in the mix. Excellent Site hitting all the notes in the scale sort of speak.

Mo Montana
Florida, USA

Article Topics

 
Copyright © 2005 - by Larry Lim, Singapore - Article Search Engine Directory at ArticleSphere.com™
All Rights Reserved Worldwide. All Trademarks and Servicemarks are the property of the respective owners.
ArabicBulgarianCatalanChinese (Simplified)Chinese (Traditional)CzechDanishDutchEnglishEstonianFinnishFrenchGermanGreekHaitian CreoleHebrewHindiHungarianIndonesianItalianJapaneseKoreanLatvianLithuanianNorwegianPersianPolishPortugueseRomanianRussianSlovakSlovenianSpanishSwedishThaiTurkishUkranianVietnamese