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What is a lease?
A lease is a contract where one party (Lessor) allows another (Lessee) the exclusive right to use and possess its equipment for a specific period of time. The contract obligates the Lessee to make periodic payments, or rentals, to the Lessor for the use of the equipment. A lease utilized as a source of financing is usually a long-term agreement that is non-cancelable. The Lessee is responsible for all peripheral costs associated with the use and maintenance of the equipment, including such things as taxes and insurance, during the term of the lease. At the end of the lease term, the Lessee may have the option to purchase the equipment based upon a predetermined purchase option.
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.
Why Lease?
Affordable payments...potential decreased tax liabilities...preservation of bank lines of credit...easy add-ons and improved cash flow. Thanks to benefits like these, eight out of ten U.S. businesses use lease financing to acquire the capital equipment required for growth.
Who can lease equipment?
Any company, organization or association and all municipal, state and government agencies can apply for leasing. We do not lease vehicles or equipment to an individual for personal use.
What type of Equipment does Dealers Leasing finance?
Any new or used equipment acquired for the production of income (i.e. equipment used for a business purpose). We also lease commercial vehicles, fleet vehicles, construction vehicles and company cars.
Can I lease software?
Yes. Dealers Leasing can provide up to 100% of the cost of your next software purchase.
How do I apply for a lease?
Applying for a lease is easy. You can fax our on-line application to us or just call and speak to one of our representatives to get started.
How long does it take to be approved?
Depending on complexity, completed applications with appropriate financial documentation will have an approval within one to three working days.
How is my monthly payment calculated?
A monthly lease payment is determined by a Lease Rate Factor: a periodic rental payment to a lessor for the use of assets. The Lease Rate Factor multiplied by the equipment cost determines the monthly lease payment.
Do I need to have insurance on leased equipment? Am I responsible if the equipment is damaged or destroyed?
Insurance is required on all leased equipment. The lessee is responsible to keep all leased assets in original condition with normal wear and tear.
When does the lease start?
The lease starts when we receive acknowledgement that the equipment or vehicle you ordered has been received and is in good working order. The initial payment is pro-rated to the end of the month and all remaining installments are due the first of each month.
Can equipment or vehicle be added to a lease at a later date?
It is as easy as setting up another lease. The new payment is simply added to your monthly statement.
Who owns leased equipment?
Dealers Leasing, as lessor, is the owner of the leased equipment until the end of the lease term.
What is the interest rate in this lease?
Lease rates are different from interest rates. Since you are leasing and not taking out a bank loan to finance your purchase, there is no “interest rate” as we usually think of one. With leasing you are paying to rent the equipment, with the monthly payment amount based on the type of leasing plan you choose, the terms of the lease, the cost of the equipment, and business and personal credit history.
Can the lease be cancelled?
No. A lease is a non-cancelable contract.
May I end my lease early?
Yes. Your payoff will be less than the sum of the remaining payments.
What is the buyout at the end of the lease?
You have a variety of options available to you in structuring the end of the lease term. Depending on the collateral, we have a $1.00 buyout, or a fixed amount end of lease purchase agreement. These options are pre-determined at the beginning of the lease so that you know exactly what you are going to pay. We can also structure some vehicle leases with a Fair Market Value end of lease purchase option if that better suits your needs.
Are lease payments a tax write off?
Most all vehicle leases and some equipment leases can be structured so that the lease payment can be written off as an operating expense. It is recommended that you consult with your tax advisor for the specific application to your business.
Are lease rates variable?
No. Lease rates and terms are fixed.
Can service and installation costs be added to a lease?
Yes. Installation and service fees can normally be included in the lease.
I have a new corporation and need equipment, what type of paper work will be required to obtaining leasing?
New Corporations are subject to additional documentation beyond the lease application required for the established business. These may include: two years tax returns and personal financial statements for each principal and occasionally a completed business plan.
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