By now we all know, (at least if you are a regular visitor to this blog) that equipment leasing makes sense on a number of levels, with easier access to funding (covering the costs associated with installation and maintenance), access to the newest technology, tax benefits, and improved operations and efficiency.
The All Important Contract
What may be less known is that equipment leasing comes in a variety of forms, and some leasing options will work better for some companies than others. It becomes important that you choose the leasing option that is most proper for your business and your needs.
This is where the contract comes in. You should make sure that you have a clear understanding of your contract and its contents, recognizing your obligations in the deal, the company’s responsibilities, and that everyone is properly represented and commitments stipulated.
You should also compare a number of other offers, looking at such issues as cost per month, possible upgrades, replacement for equipment that becomes obsolete, renewal terms, and any customer training that may be a part of the agreement.
The Devil Is In The Details
Many contracts have a maintenance agreement, and this merits scrutiny. Most companies will have a separate contract for this, but either way you need to know what happens when leased equipment becomes damaged. How much time will be required to fix the item or replace it? Faster is better, since in most cases involving business equipment, down time means lost revenue. What if the latest, greatest model is released? Is your equipment upgraded promptly or are you required to wait until the contract expires?
Also, beware the hidden fee, which seems to be a part of most leasing contracts these days. Some force you to pay for things like training or services. While training may be required for new equipment, these costs should be detailed prominently in the contract.
Finally, don’t assume that the equipment you are receiving includes everything that is required for it to run properly. Make sure your contract provides for all software or other components necessary to allow the unit to run efficiently.
LeaseQ is a small business equipment leasing leader.