Masonry Magazine December 2004 Page. 11
Leasing Equipment
By Michael J. Fleming
President, Equipment Leasing Association
10 Questions to Ask
Before You Sign on the Dotted Line
With approximately eight out of 10 US businesses using lease financing for some or all of their equipment, chances are you will be considering a lease agreement for your business, if you don't lease already. The range of equipment you can lease—from computers and office equipment, to inventory and heavy manufacturing machinery—and the types of leases, from short-term to longer-term, make leasing a flexible, convenient option for acquiring the equipment you need to operate and grow your business.
So what should you know when looking into lease financing? Start by identifying the lease agreement that fits your equipment and business needs. Below are 10 questions to ask before you sign on the dotted line:
1. How Will We be Using the Equipment?
Determine in what way and for how long your firm will use the equipment. This will help determine the appropriate level of investment for a lease. To help decide if leasing is a profitable financing option, perform a simple cost/benefit analysis that compares the periodic leasing payment to the revenue you expect to generate from using the equipment.
2. How Well Does the Leasing Company Representative Understand My Business?
It's more advantageous for you to work with a leasing company that understands the masonry industry. A key reason that businesses lease is for a customized option that takes individual needs and requirements into account. Whether you need to keep an eye on areas such as cash flow, budget, transaction structure or seasonal business fluctuations, your leasing company should be aware of your focus areas. For example, if you have a seasonal masonry business, you would want to negotiate flexible lease terms allowing you to forgo a lease payment without a penalty during your low season.