Before You Sign on the dotted line, here are some things to make sure you understand.
Is this a Lease, or is this a Loan? The answer to this question can have an impact of your financial statements and your tax liability. Visit here for more information about this important topic.
What kind of collateral do I need? Will the business assets be sufficient or is there the need for additional collateral, such as real estate or some other hard asset.
How much will it cost? There is a lot more to this question than just the interest rate. Your interest rate will be a function of the financing source's risk assessment. In addition, many financing packages have upfront charges called "points". Many people forget to include these in the overall cost.
What are my obligations for the equipment (such as insurance, taxes and maintenance) during the term? For example, most lenders will require that you maintain insurance coverage sufficient to cover the balance of the loan.
If you are choosing a leasing package, you need to ask additional questions, such as:
What is the total lease payment and are there any other costs that I could incur before the lease ends?
What happens if I want to change this lease or end the lease early?
How am I responsible if the equipment is damaged or destroyed?
Can I upgrade the equipment or add equipment under this lease?
What are my options at the end of the lease?
What are the procedures I must follow if I choose to return the equipment?
Are there any extra costs at the end of the lease?
If you have specific questions, feel free to contact us by clicking here.
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