Blunders to Avoid while Leasing Equipment
Leasing equipment from a firm can’t be done on a last-minute basis. You need to shop around so you have a clear idea about the different kinds of rates and which would be the best suited for you. The amount you can afford to shell out for leasing equipment also plays a major role.
Here are a few common blunders to avoid while leasing equipment:
Lowest Rate
Deciding solely on the basis of lowest monthly payment is a huge no-no. Total lease pricing can’t be computed based on these sums. You need to list and analysis your priorities when it comes to a leasing arrangement. Incorporate factors such as balance sheet considerations, tax considerations, selecting the right leasing partner, choosing the correct form of lease, getting proper flexibility, and staying away from extreme lease terms.
Lease Agreement
While going through the lease agreement, quite a few people make the blunder of skimming over the parts they don’t understand. This can cost you big time because even though most lease agreements include similar terms and conditions, there are minute but important differences. Ask questions when you don’t understand and get legal advice if required. It can help you save some cash by negotiating some clauses of the agreement.
End-of-lease Notice Deadline
This might not be a serious blunder, but if you are unable to provide timely notice at the end of your lease, it might lead to an additional lease expense if you want to return the equipment. Violation of the notice period might trigger an unfavorable automatic renewal period, which can be from one to six months.
Time Required to Close Lease
A certain amount of time is required for going through the lease planning, proposal, approval and documentation phases, or else you will have to spend more. If you rush the process, it might lead to approval delays, documentation miscues, badly negotiated terms of lease and poor selection of a leasing company. Planning ahead is a must, so establish the requirements for the lease you want, get a lease closing list from each lease bidder, answer questions by bidding lessors on time, and prepare a file with important information requested by bidders.
Equipment leasing isn’t a simple give and take process – it involves knowing the ins and outs so you can prevent such pitfalls from happening. Before zeroing in on a particular firm, conduct thorough research so you can select a leasing company with a good reputation and experience.