When you want to finance or lease equipment as a small business there are a couple of different ways to do so. The most important thing to understand is that just about any asset used to conduct a business could be considered “equipment.” You have the choice to either lease or finance an equipment acquisition.

For many years the two methods were very different from an accounting standpoint, but after recent changes to the Generally Accepted Accounting Standards, they are now pretty close to the same thing. Although the differences are subtle this blog post discusses what they mean and how they can help you make the best decision when your business needs equipment. read more

Today there are fees for just about everything we do and in the business environment many are justified and many are simply a way for a company to make extra revenue. Banks and other commercial lenders are notorious for their fees, many of which are not disclosed to a borrower until they are signing loan documents.

We believe you should know what fees are being charged and what they are for. We’ve compiled the fee list below so the next time you apply for a commercial lease or loan you’ll be a little smarter. read more

Interim rent was originally conceived to compensate commercial lenders for the time their funds were invested beyond the traditional 30 days for the next first scheduled monthly payment of a lease. This concept is also employed in consumer real estate loans when ‘extra interest’ is charged for the days between an existing loan being paid off and the new loan becoming due. At its core this concept makes sense. Let’s assume a lender funds a loan or a lease on the first of the month and the next payment is scheduled on the 15th of the following month. Most lenders’ original calculations assume that payments will be made every 30 days and in the scenario above the first payment was actually due in 45 days. There are 15 days that the lender does not have the use of their funds and for which time they are not being compensated. So the logical solution is to pay the lender ‘interest’ at the same rate as the loan or lease is structured at for the extra 15 days. Seems fair but that’s not what’s being done by most commercial lenders. read more

The evergreen clause is a masterpiece of deception used by some leasing companies, brokers and commercial lenders. According to BusinessDictionary.com an evergreen contract is an “agreement between two parties that is automatically renewed (rolled over) after each completion or maturity period, until canceled by either party”. The way this is applied in equipment leasing situations is to provide the customer with a fixed price option to purchase the asset being leased once the initial term of the contract has expired and the customer has made all payments. This is usually negotiated before the customer has committed to the lease and is generally part of the customer’s economic evaluation and ultimate decision. The customer is even given a separate document that evidences they have the right to purchase the asset for a specific price, usually $1.00. read more