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Defer your lease decision

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Use Creative Finance to Defer Your Lease Decision

Unsure whether you should lease or purchase your next equipment acquisition? Here’s a bit of creative financing which will buy you some time while you decide.

Interest free Financing, 12 month same as cash, and  90 day payment deferral are forms of payment postponement you are familiar with.  Just open the Sunday ads and you’re sure to see everything from cars to dishwashers offered  with amazing payment terms.  The sellers are paying a portion of their profits in the form of discount points, in exchange for giving you uber flexible financing.  Why would business equipment be any different?

Creative business equipment finance has evolved, on par with consumer product finance.   Leasing companies create programs on the fly to meet your demand for increased flexibility.  However, not all equipment companies participate in the full range of financial resources available to you.  Instead, they may offer some of the programs that have deferral provisions in a lease to allow you to make your first payment, say in 90 days.  That’s helpful, but not exactly the flexibility I’m pointing you towards.   The key difference is in the ability to defer your lease decision, while keeping the cash purchase option open.

Interest Free Conversion Option

If you’re on the fence about buying versus leasing, a leasing company can set up what I would refer to as a contingent lease.   It works like this;  you (your company) agree to pay for the equipment in a certain period of time.  In the event you don’t pay the balance during that time,  the equipment purchase converts to a lease.   The benefit to you is that you can enjoy the equipment without delay and make the big leasing decision later.   Many people have asked me about this type of situation over the years, when it was really not well received by Lessors.  Customers would ask, “what if I decide to pay the lease off early”?  Now, this is a real possibility.   While it doesn’t help with paying off a lease that’s well under way, which is still a bad endeavor, it helps when you haven’t had time to decide.

This is one way that leasing companies are creatively adapting to compete with alternative finance methods.  Naturally, the leasing companies gain some customers that they otherwise would not get, using conventional lease entry alone. By allowing you to defer your lease decision, the lessor has a chance that you will allow your balance to roll into a lease.

As I mentioned earlier, your equipment dealer may not offer such a plan.  In that case, you can seek out a leasing company that will better accommodate you.  You can still use your local equipment dealer for getting the equipment.  You just won’t be using their captive leasing company for financing.

Summary of Defer Lease Decision

If you’re ready for equipment, but not ready to decide whether to buy or lease, you can defer your lease decision and get the equipment now.   Your equipment company may offer this, or you may have to go to an outside leasing company to arrange it.  This deferral arrangement allows you to choose to pay in cash within a certain time period,  with the contingency of the balance converting to a lease if not paid by the due date.   It’s a creative way to let you think about lease financing while getting you what you really want, right now.

If you need help locating such a program and would like me to assist, please let me know.  You can call me at my office at 813-901-5666 or email me.  It makes no difference what part of the country you’re in.  I’ll be glad to help you with your request and get you in the best available program for your need.

About the author

Eric Klee

My name is Eric Klee. I've been in the equipment leasing and service business since my first professional job in 1984, in Saginaw Michigan. I've owned several small businesses, including two copier companies. I presently own Digicor, inc., an independent copier sales, service and leasing compay I began in 2000. I call Tampa Bay, Florida home, having moved here from Flushing Michigan in 1989.

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