Who can lease?
Any company, organization or partnership. Eight out of ten American
companies lease equipment.
Who owns the leased equipment?
Lease One Financial Corporation, as the lessor, is the owner.
What is the process for leasing equipment?
Lease One reviews the credit information supplied. Upon approval,
the lease agreement is prepared by Lease One. When the equipment is
delivered, Lease One pays the dealer and begins billing the lessee
for the agreed upon lease payments.
Is a down payment required?
A security deposit, usually equal to one or two months' lease payment,
is generally needed. This differs from a down payment in that the
amount is typically much smaller and it is a true deposit which
can be applied to the purchase price of the equipment at lease-end,
or returned if there are no other payments due.
How are lease payments determined?
The monthly payment is based on the term of the lease, credit standing
of the lessee, cost of the equipment, and the type of leasing plan
the lessee chooses. The initial term of a lease usually runs from
36 to 60 months.
What are factors used to determine
Type of business, length of time in business, financial condition
as indicated by the lessee's financial statements, references from
financial institutions, and D. & B. or other credit bureau ratings.
Can the lease be canceled?
Usually no, but equipment can be traded in for new, leased equipment
before the expiration of the initial term.
Can equipment be purchased at the
end of the lease?
Yes. The lessee has the option of continuing to lease, purchasing
the equipment, or returning it to Lease One. At lease end, Lease One
will also offer to finance the purchase price of the equipment for
the lessee's convenience.
Who should sign the lease?
The lease should be signed by an authorized officer of a corporation,
by one of the partners of a partnership, or by the owner of a sole
Who services or maintains the equipment?
The lessee receives the benefit of all "buyer" warranties
and is responsible for the cost (if any) of maintenance. The equipment
vendor usually performs the maintenance.
What about insurance?
For the protection of both Lease One, as owners of the equipment,
and of our lessees, who need the equipment for their business operations,
we require that the equipment be insured.
How does the lessee account for the
The lease can be structured so that 100% of the payment is deducted
from income taxes. At the same time it is not recorded as a loan
on the balance sheet.
What effect does leasing have on
the lessee's bank line of credit?
Established bank lines are usually unaffected and can be maintained
for day-to-day working capital needs.
There are a number of advantages which make leasing an attractive
option for many firms. These include the fact that leasing offers
fixed regular payments (not floating), provides financing for 100%
of the equipment cost, allows businesses to pay for equipment as
it is used to generate income, conserves both working capital and
lines of bank credit and may offer certain tax advantages