Tips for Leasing Equipment
When creating a budget for a new business, big amounts are demanded by equipment acquisition and the business may not be in a position to finance them hence opting for lease. It is crucial to check the terms of a lease to get the best deals. Below are the tips for leasing equipment.
The vendor should inform you what you are supposed to do on a lapse of the lease period. In case you do not get clear details of what the vendor expects from you on expiry of a lease contract, you can find yourself in an undesired situation. Some companies require you to give a notice in advance to avoid your lease contract from being renewed automatically. Check if it is possible for you to buy equipment you have proved to satisfy.
Discuss the lease termination policy. In many occasions, the period of the lease expires after 6 months. You may purchase equipment for your business or the leased equipment be unable to satisfy your needs hence making you opt to terminate a contract prior to the lapse of the agreed time. You should know if the policy of the vendor allows such termination and what you are needed to do.
You should inquire who will pay for repairs. Prior to deciding on leasing equipment, it is important to know the expectations a vendor has on you in case of equipment damages while in your hands. Various vendors use different policies regarding repairs with a number taking the responsibility to pay a certain percentage of the amount used to repair the equipment so long as you are committed to paying monthly payments without delays. Others will need you to pay the whole amounts used for repair as long as the equipment gets damaged while under your care.
You should know the period for which you are planning to lease. When setting up a business, you are more likely to need to lease equipment for a longer time before you can buy your own equipment. On the other hand, it is possible for something to come up and need that you have certain equipment for a limited period. It is not wise to buy equipment you will use shortly. Knowing the period for which you are going to lease will enable you to enter into a correct contract.
You should inquire about tax compliance. In many cases, the lease lays the responsibility of paying taxes to the vendor while the lessee compensates the vendor for those payments. You should ensure that the lease clearly states so rest you will be charged for penalties and interest that came as a result of the vendor neglecting to file taxes or make payments.