Just about every commercial lender has internal policies regarding how they treat Commitment Fees, Early Terminations and Privacy Issues all of which are considered non-origination income opportunities. Generally these policies are considered quasi-confidential simply because they are not very customer friendly. We believe that sharing these policies with our customers and potential customers eliminates some of the mystery associated with commercial loans and is a quicker path to trust.
Financing Proposal / Commitment Agreement
Formal Financing Proposal / Commitment Agreements and commitment fees are required in some instances, usually larger more complex transactions and in some cases to insure that the applicant is serious about the financing that they have inquired about and that if the transaction is approved under terms agreeable to both parties, they will proceed with the lease or loan. These terms will be detailed, in plain English, in our document.
Our Commitment Agreement clearly states that if we provide an approval on the terms you approved, we have earned our fee and if you decide not to move forward with the lease or loan we will not refund the Commitment Fee. However, if we can’t provide an approval or we don’t do so within the period of time allowed or if an approval is significantly different than described in the document we will refund 100% of the fee immediately, no games and no tricks no questions asked.
One of the most common questions asked by our customers is……….“Is there a Pre-Payment penalty if I pay my lease off early?”
That’s a good question but it’s not really what the customer wants to know. The question they should ask is:
“Will I get a rebate of unearned finance charges if I pay my lease off early?”And our answer is……………………………………. Maybe.
Most equipment leases are non-cancellable and require the lessee to make each and every payment in the amount agreed upon in the Lease, a legal and binding contract. Since Charter Capital is a broker we fund our leases with a variety of lending partners. The decision whether or not to grant a rebate rests with them and to a large degree depends upon your payment history and the length of time the lease has been running.
Although these don’t differ greatly, there may be subtle differences in calculations. It is our policy to extend to our customers any and all benefits realized as a result of their early termination of a lease transaction provided the lessee has complied with the terms of the prevailing lease agreement. In simple terms, we will give you any rebate we receive relative to your lease if you pay it off early.
A Word to the Wise. Set an alarm in your OUTLOOK or whatever calendar program you use to ask for the return of the security deposit at the end of the initial lease or loan term. If you don’t ask for it most commercial lenders will keep it or return it to the broker that initiated the lease or loan.
As you might imagine we collect a great deal of sensitive business and personal information on many of our customers and potential customers and some of it is very personal and very private. Information on divorces, past business failures, lease or loan defaults, personal income, savings accounts and stock portfolios, real estate debt, personal loans and all sorts of other obscure information that should be handled with respect and confidentiality. We maintain all information electronically and have no paper files and when we receive a request or information in hard copy we shred the originals. We have abundant electronic security and always maintain a healthy respect for the rights of others. We will never sell or share your information with anyone except our lenders.