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 important to check terms used for leasing in order to get suitable deals. Below are the tips for leasing equipment.
Talk with your vendor what you should do when the lease is expired. 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 will automatically renew the lease contract if you fail to give prior notice. Check if it is possible for you to buy equipment you have proved to satisfy.
Ensure you are informed about the policy of terminating a lease. In most cases, a lease period lasts for 6 months. However, you can decide to end the contract before the contract period ends due to the acquisition of your own equipment or that your specifications are not being met by the equipment you leased. You should inquire from the vendor if it is allowable and if, the vendor should explain the implications thereof.
Ensure you know whose responsibility repairs are. 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. Different vendor have different policies with some agreeing to pay a portion of the total costs of repair as long as you observe punctuality in paying the monthly installments. 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 determine the time for which you will 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, something can arise and create the need for equipment which you will only need during a short period. It is not wise to buy equipment you will use shortly. Knowing the length you should lease helps you to enter into the right agreement.
Ensure you get informed about tax compliance. Unless otherwise stated, a lessee is needed to hand over the amount needed to pay taxes to the vendor who in return makes the payment. However, it is good that you ensure that this is indicated on the contract because the vendor can omit filing taxes or making payments and the responsibility of paying penalties and interests be put on you.