Why You May Need To Lease Expensive Equipment

Business people and entrepreneurs are not always in a position to buy the equipment that they need to use in running their enterprises

. As such, they must be able to look at other readily available options of acquiring such equipment. Among the options they can work with is the lease option. Lease equipment is availed to a lessee at a flat rate which the lender and the borrower agree upon. The amount is payable on a monthly basis for a specified amount of time which could be one year or more. In most cases, a lease contract is renewable. However, the two parties to the contract may agree that at the end of the lease period the borrower will buy the equipment.

There are many companies today that are dealing with lease equipment and the motivating factors behind the business is that;

1. Lease equipment is on demand by both large and small companies that are not yet financially stable to buy expensive but so much needed equipment. As the leasing firms rent out the equipment, they can provide additional services like installation, training and maintenance and charge a small fee. This is an additional source of revenue for them.

2. Although leasing is still an expensive option compared to bank loans, many business people still prefer it over bank financing or borrowing from other financial institutions.

3. The lease application is a process that is easy to follow and adhere to. As such, it beats the loan application process. When looking for a company that deals with lease equipment, keep in mind that, finding one is not a hard task because they are all over.

The tricky part is finding a company that will offer you durable equipment which is in good shape at fair prices. If you can, get quotes from as many companies as you can and compare the rates. Before you sign the lease agreement forms, find out what the selling price will be when you finally decide to buy the equipment. Compare this to the current selling price and see what you stand to lose or gain. Again, before signing that agreement, you need to be sure about the leasing company.

Find out how long they have been in operation. If possible, get a review from their clients who have leased equipment from them before. The leasing company should be one that you can get recommendation for from companies that you are in business with. When you are sure about the leasing company, the next thing is to apply for the lease equipment. Generally it takes about 48 hours for the company to respond to your application.

They will respond in one of three ways;

1. Approved- you can go ahead and pick the equipment and documents as well as sign the contract.

2. Declined- you will be given the reasons why. You can go ahead and look for another leasing company.

3. Provide more information- This is in case they find the details about your business wanting or a little bit limited as hance will erquire you to be more elaborate.

Why You May Need To Lease Expensive Equipment

By: Peter Gitundu

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