The Basics of a Lease

1) What is a lease?

A lease is a binding document where one party (the lessor) gives another party (the lessee) the exclusive right to use and possess its equipment for a specific period of time. The document spells out the terms in which the equipment is leased.

2) Who can lease?

Any Commercial, Municipal, Federal, Not For Profit, and Tribal entity. These also include any Sole Proprietorship, Partnership, Corporation, or LLC.

3) What about start-up companies?

Start-up companies can experience the benefits of leasing as well. Leasing Innovations will consider all lease requests from companies in business for less than two full years. Approval depends on the situation, additional sources of income, industry experience and personal credit. All of this helps in our decision to enter into a “high-risk” lease agreement with companies in business less than two years.

4) Is a personal guarantee needed for a company lease?

The newer a customer’s business is, the more likely it is that a personal guarantee will be required. This will enable us to offer financing for the equipment acquisition, and even extend the lease term.

5) What can be leased?

Leasing Innovation’s lease programs allow our customers to lease virtually any piece of new or used equipment that is needed for a trade or business. See our Equipment List for a complete list.

6) How long does it take to be approved?

Once our Credit Manager at Leasing Innovations has received all required financials, you will be approved within 24-48 hours.

7) What dollar amount can be financed, and for what term?

One may lease equipment for a minimum of $1,000, to in excess of $30,000,000, while 12 – 60 month term leases are available.

8) What are a lessee’s options at the end of a lease?

Leasing Innovations, Incorporated offers two lease options to fit our customers’ needs:

• Capital Lease ($1 Buyout)

This option is ideal for the lessee who wishes to own the leased equipment at the end of the term. Not only does it cost just $1.00 to own, but it also allows the lessee to clearly define business costs and easily manage cash flow. Monthly payments, however, are typically higher than the payments of other leases.

• Operating Lease (Fair Market Value)

The Fair Market Value solution is excellent for those who expect the value of their equipment to decrease quickly, or will want to upgrade their equipment at the end of their lease. At the end of a lease term, the lessee may choose one of the three options: extend the lease, purchase the equipment for its “fair market value,” or return the equipment with no further payment obligations. Furthermore, Fair Market Value lease payments are treated as a business expense, not a liability, and can be deducted immediately from operating income.