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Equipment Leasing Buyer's Guide - Choosing A Lease

Equipment Leasing Buyer's Guide - Choosing A Lease

Published: 04/18/2011

» Business Equipment
» Business Loans
»» Equipment Leasing

 

Choosing A Lease

Once you've picked out equipment and decided to lease it, it’s time to get quotes. Four to six quotes can give you a good sense for what the market is charging. Before choosing an equipment lease, be prepared to talk to several lessors and provide the following information: the cost of the equipment, the length of the lease, and whether or not you will purchase the equipment at the close of the lease.

 

 

When shopping around for quotes, it's important to make sure you are comparing apples to apples. For instance, has the quote been calculated based on two advance payments and a security deposit, or on one advance payment alone?

 

 

Even though quotes are not 100% exact (a credit check needs to be done first to be certain), they are usually pretty accurate. In the end, payments may go up or down depending on how good your credit turns out to be.

 

 

Make sure it’s clear how often and under what circumstances your rate can changed. Annual rates are preferable to monthly. Watch out for leases that give the lessor the ability to jack up your rates if you’re late for one payment.

 

 

 

 

Applying for an equipment lease

 

When choosing a lease, feel free to shop around for quotes – but don't complete a lease application unless you are absolutely sure that you'll lease through them upon being approved. Equipment lease applications are treated as credit applications – and since each application shows up on your credit report, excessive inquiries damage your chance of being accepted.

 

 

Surprisingly, an equipment lease can sometimes be more difficult to obtain than a traditional loan. Many equipment leasing companies will not even consider your application unless you have two years experience; others have absolute minimum credit scores of 600 or more. Before submitting an application, ask what the lessor’s requirements are. If you don’t meet them, you should probably look for a business loan, instead.

 

 

After you've submitted your application, an answer won't be long in coming. Generally it takes less than two days to find out whether you've been accepted.