Leasing equipment is very similar to renting a vehicle in the sense that you are basically “renting” equipment. In general, you will pay a flat monthly fee to leasing equipment companies to use equipment for a long period of time. However, ownership remains under the name of the company’s leasing company. In many cases, the purchase option is available on lease termination so you can get equipment ownership.
Here are some basic steps on how to rent out equipment:
1. Carefully purchase your equipment. Before choosing a leasing equipment company, it is very important that you know what type of equipment you want to rent include make and model. Very helpful if you come ready with offers from equipment vendors because equipment leasing equipment will often ask this when sending an agreement. In addition, it can explain why you need equipment and what you plan to use it. This information will help the company leasing company determine whether you are eligible for financing.
2. Leasing company research equipment. Every leasing company will need an application to uncover more information about your business practices and the guarantor’s credit history. Every company is different so be sure to do substantial research to choose the best to comply with your business. In most cases, you need to give the name of all owners / guarantors, their social security numbers, company history, federal tax ID, and basic contact information. As soon as you collect all this information, you will be ready to apply.
3. Valid. After doing all research and compiling basic information, you will be ready to apply for leasing and financing. Some companies have online applications and others require you to send faxes or send emails into it. The application process is generally quite fast and some companies will respond to you on the same day as you. Be sure to enter your SSN in your application so that leasing equipment companies can draw your credit file; If you refuse to do it, your application cannot be processed. In addition, the larger ticket items might need more time to be processed, so be patient when waiting to hear back about rent.
4. Select the term. If you are approved for financing, you must choose the term for leasing. In general, the term leasing falls between two and four years. Of course there are other options available even though the term two to four years is usually the most easily obtained. Various types of equipment will require different rental structures, so be prepared to be flexible while working with your leasing company. The longer the term, the smaller the payment. Be sure to choose a term that functions in line with your company’s cash flow so you don’t need to allocate all your resources in one place.
There are three standard end-of-term options:
1. Reasonable Market Value (FMV): Buy your equipment at a fair market value at the end of the rent.
2. 10% Purchase: Buy your equipment for 10% of the purchase price on termination of rent.
3. Purchase $ 1: Buy your equipment at the end of the rent for $ 1.
5. sign lease. The final step is to sign your rent and start rent. After completing all previous steps, review carefully every rental document and sign a contract. If you have questions or problems about anything related to your rent or equipment, don’t hesitate to call your equipment leasing equipment.