HOW DOES EQUIPMENT LEASING WORK?
Equipment lease financing is simple and convenient. You do the research and choose the make and model of equipment best suited for the business enterprise from the vendor/supplier of your choice, for the best cash deal. The potential Lessee then contacts Lease-Line, completes a credit application & provides supporting financial information as required. Upon lease credit approval and acceptance, Lease-Line will forward the lease contract for signatures. Once the lease contract and related documentation are returned to Lease-Line, a purchase order is issued to the vendor. The vendor then delivers the equipment to the lessees' place of business. After an independent auditor has confirmed delivery of the equipment, Lease-Line will pay the supplier and the lease commences.
Typically, a lease involves no money down, which basically results in 100% financing. The lease client doesn’t worry about paying Taxes up front either, since they are calculated on the rental. Two rentals and a signed lease contract seal the deal. On a five-year lease, that amounts to less than 5% investment. Effective costs compared with conventional bank financing are close. Those who can take advantage of the tax deductibility of the rentals can often increase expenses for tax purposes thereby reducing or deferring the payment of taxes. Terms are tailored to the useful life of the equipment with a fixed rental throughout the term. Upgrade privileges are standard. Trade up value, or a purchase option can be predetermined
What is the minimum size of an equipment lease?
What is the term of an equipment lease?
A lease can be structured for a term of 1 to 6 years.
What are my options at the end of the lease?
1. Fair Market Value at the end of the initial term.
2. A predetermined purchase option during the term of the lease of up to 30% of
the original equipment cost.
3. A $10.00 purchase option at the end of the term.
Will Lease-Line contact me when the purchase option is available?
Yes, we guarantee to remind you at least 30 days in advance of the purchase option date.
Types of equipment leases
Fair market value equipment lease:
The lessee simply returns the equipment at the end of the lease term.The lessee may continue leasing if the equipment is still suitable or the lessee may be able to purchase the equipment at Fair Market Value (FMV). The Lease-Line GUARANTEES to give you at least 30 days prior notice of the purchase point.*
Stretch equipment lease: our most popular equipment lease
The equipment lease contract is structured with a predetermined purchase option point. If the lessee does not purchase the equipment at the option point, lessee continues leasing to the end of the term at which time he may continue leasing, return the equipment to the Lessor, or purchase the equipment at Fair Market Value (FMV).
The stretch lease is set up with a guaranteed predetermined purchase option, for example, 10% of the original equipment cost. If the lessee chooses NOT to take the purchase option at the purchase option point, the 36th month, the lease continues to the end of the lease term, 40 months. At this time the lessee may purchase the equipment for FMV, return the equipment or continue leasing. A typical three year lease with a 10% option = 40 month term. The stretch term is calculated by dividing the purchase option by the rental & rounding up to the next whole number.
This equipment lease structure gives the lessee time plan for the next equipment acquisition.
Lease-Line GUARANTEES to give the lessee at least 30 days prior notice of the purchase point.*
$10.00 Purchase equipment lease:
The equipment lease is structured to a bargain price at the end of the term. This method may be not considered a lease because $10.00 is a bargain price. However, many non-profit, public sector type clients, as well as regular businesses use it at their discretion. For many low priced pieces of leased equipment, this lease classification is not an issue. In most jurisdictions as long as the equipment is on a lease contract rentals can be treated as an expense. We do not give accounting advice.
Consult with your bookkeeper or accountant If you wish. Lease-Line GUARANTEES to give the lessee at least 30 days prior notice of the purchase point.*
Seasonal equipment lease
This type of lease is ideal for businesses with seasonal cash flows. Leases are tailored so that payments might be lower during the summer months and higher during the rest of the year, or vice versa.
Semi annual, annual and quarterly equipment leases
Various payment options allow you to match scheduled payments with your cash flow. Semi annual and annual payments are very popular in the agricultural industries.
Step program equipment lease
Step leases allow lease payments to either increase (Step-Up) or decrease (Step-Down) over the term of the lease to better meet unique cash flow situations. It provides an ideal match for revenue growth and financing.
*Lease-Line GUARANTEES to remind the lessee when the purchase option becomes available. It is the responsibility of lessee to advise us of any change of address or phone numbers during the term of the lease.
What equipment can be leased?
Any NEW or USED equipment required by a business that helps it to produce income.
Lease-Line has arranged equipment leases for so many equipment types that we can not list them all.
Equipment Leasing Credit Criteria