How to Obtain Equipment Lease Money

Equipment is an expensive part of any business operation. Today there are many options available. In some cases, purchasing equipment is the best solution. In other instances, leasing equipment is the most viable alternative. Hopefully you will be able to lease so you can free up your capital for other business expenses.

Instructions

Difficulty: Moderately Challenging

1. Write a plan for leasing equipment. Determine what equipment you need. Spell out specifically how the equipment will be used. Estimate costs.
2. Compile net worth statements for your company for at least the last three years. Be sure to include the most recent cash flow statements as well. If you are obtaining less than $100,000 in equipment, this step may not be necessary.
3. Research lenders who specialize in equipment leases. Pick at least three potential lending institutions. Fill out the appropriate applications.
4. Prepare to wait. Your potential lenders may require additional information.
5. Read the lease carefully. Watch for hidden charges. Calculate the final, end-of-lease cost of any package before you sign the contract.

Tips & Warnings

• Leased equipment offers a number of advantages over purchased equipment. Advantages often include lower payments for the items, the ability to purchase newer equipment and tax savings. Leased equipment usually doesn't require down payments, freeing up capital that can be used elsewhere in the business.
• As you examine your lease contract, make sure you are working with a company that has been in business for several years.
• Equipment wears out. Find out who is responsible for any repairs or replacements during the lease period. Also, determine if there are options to upgrade during the lease period.
• There are many unscrupulous online lenders just waiting to get your signature and any upfront money you need to pay on the lease. Be sure to do your due diligence.