What is a Lease?

A lease is a contractual arrangement between you the customer and your lender. Your lender purchases the equipment from your supplier of choice and then leases it back to you for a period of time. The contractual arrangement between you and your lender will dictate the rental payment and other terms of the lease, such as the total number of payments required.

What can I lease?

The simple answer is anything! Almost any business related equipment can be leased. This includes anything from computers, office equipment and restaurant equipment to heavy machinery, farm equipment and commercial transport trucks and trailers, new and used.

Do I have to provide my personal guarantee?

Personal guarantors are often required for young businesses that do not have a well-established record of financial success.

Can a lease agreement be cancelled?

Unlike bank financing, such as business loans or lines of credit, lease agreements are typically non-cancelable and the outstanding payments owing on a lease cannot be demanded by the lender. However, the balance of lease payments owing under a lease can typically be paid in advance by you as the lessee without penalty.

What is the interest rate on a lease?

Payments for conventional financing are typically comprised of a principal component and an interest component. A lease is comprised of rental rates. The cost of lease financing is most easily calculated by adding all the rental payments over the term of the lease and subtracting the up-front equipment costs. Rental rates are based on various factors such the type of equipment being leased, the credit history of the business and/or the personal applicant and the terms of the lease. Well established businesses and applicants with a good credit history will typically get lower rental rates than new business and/or applicants with a poor credit history. At Leaseline, we will help you find the best rate possible given your particular circumstances.

How long does it take to get an approval?

The length of time required to obtain an approval depends on the deal. Smaller deals can sometimes be approved in a few hours whereas larger deals can often be approved within 24-48 hours.

Is a down payment required?

Our Lenders will usually request first and last lease payments up front to start a lease. This differs from a down payment in that the amount is typically smaller and it is a true deposit that can be applied to the lease provided the lessee fulfills all or his/her responsibilities. In other situations a deal will be structured with a down payment, such as 10% or 20% of the equipment costs, which lowers the monthly periodic payment of the lease.

What are the tax benefits of leasing?

In most cases, lease payments can be deducted as a business expense which can decrease the amount income tax payable. This income tax deduction can offset the costs associated with leasing as discussed above [What is the Interest Rate on a Lease?]. For a more detailed answer to the tax benefits of leasing, you should seek specific advice from your accountant.

Can I choose my own equipment?

Absolutely! It is completely up to you to choose the equipment and supplier that is right for your business.

What happens at the end of my lease term?

Equipment leases can have a variety of end-of-term options to choose from. You may purchase the equipment for its purchase option amount, renew the lease for a specified period of time, or return the equipment with no further obligation.

What happens if I have a problem with the equipment?

If you have problems with your equipment, you will need to contact the equipment vendor for repairs or service. Keep in mind that some vendors offer additional warranty coverage that can be included in the lease.

Who services and maintains the equipment?

The customer (i.e. the Lessee) is typically 100% responsible for service and maintenance of the equipment.

Do I need to insure the equipment?

Yes, insurance on the equipment is required by all lenders.

How will you determine my credit rating?

Length of time in business, financial condition, type of business, credit history, references from financial institutions and credit bureau ratings.

What information will your request in connection with my lease?

The information and supporting documents required will depend on the particular circumstances of your deal. In all cases, we will ask for basic information about your business and the equipment you want to lease to get started. We will follow-up for additional information as required to get your deal done.

What terms are available?

Most leases are written for 24, 36, 48, or 60 months depending upon the type of equipment.

Can I still lease equipment that I have already purchased?

Yes! This strategy is called a Sale Lease-Back.

Why do I have to give a personal guarantee?

Personal guarantees are typically required to strengthen a deal. For example, personal guarantees are almost always required for new businesses that have been in operation for less than two years.

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