 Can I be guaranteed the lowest rate?- What are my chances of getting approved?
- How long does the equipment financing take?
- Are there any limitations on what type of
equipment you will fund?
- What are my options if the equipment supplier
requires a deposit?
- Can I include installation, warranty and
training costs to the total lease amount?
- What if the equipment is delivered, and
then it is not satisfactory?
- What if I’m buying equipment from more
than one seller?
- Is it a problem if all the
equipment will not be delivered at the same time?
- What if I do not want the equipment
before my lease is over?
- Can I lease used equipment, or equipment I currently own?
- Can you provide deferred payment options?
- Are there any fees?
- Who insures the equipment?
- Who is responsible for paying taxes?
- Who provides warranty coverage on the equipment?
- What is the interest rate on a lease?
- What is a Capital Lease?
- What is a True Lease?
- What is a Finance Lease?
- What is an Operating Lease?
TechLease is privately independent leasing company owned and operated with a small group of
partners. A large percentage of the funds originate from the partners and
private investors. Ours cost of funds are thus lower than the the average
lessor.
Our overhead costs are low, because we operate with inexpensive software, and
spend very little on marketing and advertising.
We can't guarantee every application, but if you have a good story, we DO
look beyond the basic credit criteria established by larger institutions.
Requests for up to $100,000 can often be approved in
5 days from a one-page credit application. Documents are emailed to the
customer in PDF format, and a Purchase Order is immediately faxed to the vendor once documents
have been received. Rates are calculated based on your credit history, the
dollar amount involved, and the term of the lease or loan.
There are certain types of equipment that have such high default ratio that
we are unable to lease them. However, credit drives the types of
transactions we can approve. This means, the better your credit, the
better your chances of leasing restricted equipment. Some of our most
popular equipment include:
Enterprise servers, Networking Equipment, Telecommunications Equipment,
Medical Equipment and Software.
There are several options:
- You can pay the deposit and lease the remaining
balance.
- Lease the entire cost, including the cost of the
deposit.
For option 2, TechLease can pay the deposit with a short term loan, or
you can pay the deposit and we will pay this back to you in cash when the lease
commences.
Yes, we can include all associated costs with the equipment purchase.
We will obtain telephone verification from you that the equipment is as
ordered and working to your satisfaction before we remit final payment to the
seller. If there is any issue, you may refuse to “sign off” until it is resolved
to your satisfaction. This will prevent payment to the seller from happening.
Frequently equipment is obtained from multiple vendors. Generally this
doesn't represent a problem unless the number of vendors is very large or the
scheduled deliveries are very far apart.
No. Payment to seller(s) can be made as equipment is delivered or at the
conclusion of all items being delivered. You should agree to terms with the
seller and get the
lessor's approval at the beginning of the credit approval
process.
No, the lease is a non-cancelable agreement for a
specified term that you select at the beginning of the lease. Leases are
available for terms ranging from 24 to 60 months (depending on equipment type),
and the equipment can be upgraded or more equipment can be added.
Yes. This type of arrangement is called a
sale leaseback. We buy the equipment from you, then you pay rent to
use. It is a great
way of generating cash, without taking out bank loans. The equipment
must be appraised to determine the current market value, and TechLease
must verify if any liens currently exist.
Yes. For companies that need equipment today yet will not generate
profit / revenue for a short period of time, a 60 to 90 day deferred lease
structure is very attractive. The lease is structured so that the initial months
have nominal or no payments. Usually one advance payment is required, and the
next payment is not due until the second (60 day) or third (90 day) month of the
lease.
A $250 documentation fee applies when the lease is executed.
A one time security deposit is credited to your first lease payment. If you
require wired funds or express mail delivery, the cost of those fees will be
passed on to you.
The End-User
Lessee is responsible for insuring
the equipment against risk of loss including property and casualty coverage and
liability.
Lessees typically just add the equipment to their existing policy.
Because we offer a "net" lease, the end
user/lessee is responsible for all taxes. We are required by law to collect all
applicable sales and use taxes and remit them to each state.
TechLease passes through all manufacturer
warranty coverage to the
lessee. Warranty claims are processed for the
lessee in
the same way they would be if the
lessee were the owner of the equipment.
The amounts charged on an equipment lease are
calculated using monthly "lease rates", rather than by using a compound interest
rate method that is normally associated with conventional loans. Lease rates
are based on the term of the lease, the
lessee's credit standing (both business
and personal), and the type of equipment being leased. The stronger and more
established your business, the lower your payment should be.
The simple definition of a
capital lease is: A lease obligation that has to
be capitalized on the balance sheet. In more detail, the capital lease structure
allows you to buy the equipment at the end of the lease term. Typical end of
lease options for a capital lease are the 10% or $1.00 purchase option. This is
especially advantageous for companies that intend to keep the equipment at the
end of the lease term. You can also trade in the equipment for new equipment or
sell the equipment at the end of the lease.
To be more specific, this lease structure is treated by the
lessee as both the
borrowing of funds and the acquisition of an asset to be depreciated. The lease
is recorded on the
lessee's balance sheet as an asset and corresponding
liability.
Capital Leases will contain one or more of the following:
Ownership of the property is transferred to the
lessee at the end of the lease
term
The lease contains a purchase option such as 10% or $1.00 out
The lease term represents at least 75 percent of the estimated economic life of
the leased property
The present value of the minimum lease payments at the beginning of the lease
term is 90 percent or more of the fair value of the leased property to the
lessor at the inception of the lease less any related investment tax credit
retained by and expected to be realized by the
lessor.
A
True Lease which is also known as a
fair market value (FMV) lease provides
the most standard type of lease agreement. This type of lease structure will
offer you the lowest monthly payment for new/used or
sale leaseback leases. In
some cases, your business can claim the lease payment as a tax deduction. This
lease structure will allow you many options at the end of the lease. Such
options are:
Purchasing the equipment at the current
fair market value
Upgrading to new equipment
Renewing the lease
Returning the equipment
Unlike an Operating Lease (see next post) a
finance lease is a form of
leasing where you, the
lessee, pay the full cost of the equipment, plus
interest, over the primary term of the lease agreement. Monthly payments are
determined during the lease structuring process and represent the full value of
the equipment.
Key points of finance leasing:
The value of the asset (equipment being leased) is shown on your balance
sheet
This lease structure is typically not used if rapid tax benefits are
desired.
Opportunity to own the equipment at the end of the lease is more
advantageous being that the equipment can be purchased for a minimal cost.
One of the most common types of leasing is an operating lease. What is an
operating lease and what can it do for me and our company? Well, let's look at
the basics.
Operating leases are a form of
off-balance sheet financing that provides the
option to continually upgrade or replace your current equipment without the
worry of ownership. End of lease options allow you to return the equipment so
that technological obsolescence is avoided. You will find that an operating
lease will have a lower monthly payment than other lease / finance alternatives.
TechLease L.L.C.
Copyright © 2005 TechLease L.L.C. All rights reserved.
Revised: 04/20/06.
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