Do you know all your options?
“Get another quote” is often the recommended advice when making a large purchase and “Get another opinion” when making a medical decision. The same advice can be applied to a lease contract. Business owners do not have to meekly accept the lease contract offered by the Equipment Vendor; they can shop it.
A lease quote only provides part of the information needed to make a decision, but answers to additional questions will provide a more complete analysis of the lessor. After all, a lease agreement can translate to a 2–5-year relationship with the leasing company.
Not all leasing companies are alike. There are three basic categories of lessors, which include Independents, Captives, and Brokers. (Clune/Landmark, is an Independent.) However, there are other factors to consider:
- Are there Surprise fees and hidden Costs?
- What are the return conditions?
- Do they offer flexible contracts?
- How is their customer service?
Surprise fees can include “forced” insurance premiums, property tax filing fees, End of Lease automatic renewals of a minimum of 6 or 12 months, and late fees at 1 day past due, as outlined in this chart. As you can see, these costs can be substantial.
Will you need to notify the company 90 or 120 days in writing of your intention to return the equipment at the end of the lease term? Are there onerous shipping deadlines with the risk of imposed penalties?
If you have a seasonal business and would like a progressive or balloon payment schedule, is this an option? Will they adjust the length of the contract to a time span that is more suitable for your business?
Finally, how responsive are the leasing agents? As the creditor, the lease provider should be able to answer all questions concerning payment schedules and contract terms.
Let us know if Clune/Landmark can be of service.
It is the Lease we can do,
Kevin F. Clune, CLFP
Clune & Company, A Division of
Landmark Financial Corporation
