How Equipment Leasing Works

Depending on the financial stability of your business, leasing companies will have different requirements. If your business has a solid financial foundation, a leasing company will only require the first and last payments. If you are a start-up company, the leasing company can require as much as 25%.

Also, depending on the type of lease, you may be offered deferred payments for ninety days, seasonal payments or half payments for a given time.

Furthermore, depending on the documentation you are willing to show, you’ll have different conditions and limits. Many lenders require full documentation which includes a couple of years of personal income tax returns, a personal financial statement, and other underwriter requirements.

On the other hand, there are lenders that don’t require much documentation. If you don’t want to show much documentation but are an established business, you’ll be able to get a leasing for as much as $250,000. If you are a start-up company, you may be able to get $100,000 without documentation.

Another aspect to consider is that the duration of the lease depends on the type of industry and the equipment itself. In general, most leasing companies will give you a lease for 30-60 months. In most cases, they won’t finance any equipment that is over 10 years old.

Of course, it is important to clearly understand the terms of the lease. Make sure your leasing broker explain them to you. It is part of his job. These are a few of the things you may consider before choosing a lease:

• -Payments – How much money you will have to pay at the beginning and during the life of the lease
• -Leasing terms – How long will it last?
• -Conditions – Is there any prepayment penalties?
• -Approval time – How long does it take to get approved?
• -Option of payment deferral – Is there an option for the deferral of payment?

Please let us know if you are considering leasing as one of your financing options. We can find the right lender for your specific business situation. You have nothing to loose as we work on a contingent basis and get paid by the leasing companies.