Understanding what equipment can do for your business is only one side of the issue when it comes to leasing it. Understanding and selecting the best lease for your company is a different story. The market is ripe for firms to employ equipment leasing to develop, grow, and refine their assets, but there is little information available to help them decide what is a suitable lease and what isn’t.
You get exactly what you see.
You get what you pay for, according to an adage. When it comes to equipment leasing, you want a contract that spells out your responsibilities and those of the lessor. You sincerely hope that what you see is what you receive. So, how do you go about deciding which sort of lease is ideal for your company?
The easiest way to get started is to look at your possibilities. If you already know what kind of equipment you require, compare the various vendors’ offerings. The following are some crucial figures to ensure are included in any lease option:
Monthly Maintenance Contract Cost
Maintenance Contract Costs
There is a training available.
Service to Customers
Support for both software and hardware is available.
Upgrades for Obsolescence
Terms of Renewal
When it comes to long-term leases, it’s best to set the terms upfront so that the company’s overhead is as low as feasible. When it comes to maintenance, several leasing businesses offer it as a stand-alone service. If a piece of equipment breaks down completely, the leasing firm will most likely replace it. But what happens if the machine breaks down? Will it take two hours, four hours, or twenty-four hours to get a service specialist on-site and the equipment back up and running?
This information is crucial because if a piece of equipment isn’t operational, it’s just a piece of garbage taking up space and interfering with routine business operations. Contracts for upgraded maintenance will have to be negotiated. But there’s also the worry of what will happen when a newer, more advanced piece of equipment becomes available. Is it possible to upgrade to this kind of equipment under the conditions of the lease, or will you have to wait until the contract is up for renewal?
Keep an eye out for hidden costs.
A business can minimize hidden costs by receiving the facts upfront. They can set budgeting goals and, in the case of long-term leases, bring up training needs for their employees. This is another issue that some businesses overlook when negotiating a lease. Will the leasing company provide training to the equipment’s operator? Do they have representatives who are familiar with the equipment’s operation and can provide certified training? What happens if that isn’t the case?
While this will not be a worry for every piece of leased equipment, it is important to know if certified training will be accessible for those organizations that require it. How is a software licensing handled in the event of leasing computer equipment? Is it included in the hardware lease, or must those licenses be purchased separately?
Finally, knowing the renewal terms will help you avoid an increase in the cost of renewing your equipment lease. Some contracts allow you to lock in pricing for up to five years. Although the lease may only be for two years, the cost of that particular piece of equipment is locked in at the time of renewal. When it comes to making a long-term budgeting forecast, every bit of data counts.
A firm can compare leases by clearly specifying what each contract with a leasing company entails. A firm can choose the finest equipment lease for their company by comparing the various alternatives, pricing levels, and services offered by different leasing companies.