Factors to Consider When Leasing Equipment
When money allocations are being made when starting a business, buying equipment needs high amounts which entrepreneurs may not have at the moment thus opt to lease. It is crucial to check the terms of a lease to get the best deals. Below are the tips for leasing equipment.
You should ask the vendor for their expectations concerning you when the lease period ends. In order to avoid instances that put you in confusion, you should inquire what a vendor expects from you when a lease contract expires. Some companies will automatically renew the lease contract if you fail to give prior notice. You should be informed of the possibility to purchase the equipment you found to meet your needs.
Ensure you are informed about the policy of terminating a lease. In most cases, a lease period lasts for 6 months. However, you can decide to end the contract before the contract period ends due to the acquisition of your own equipment or that your specifications are not being met by the equipment you leased. You should know if the policy of the vendor allows such termination and what you are needed to do.
You should inquire who will pay for repairs. Prior to deciding on leasing equipment, it is important to know the expectations a vendor has on you in case of equipment damages while in your hands. Various vendors use different policies regarding repairs with a number taking the responsibility to pay a certain percentage of the amount used to repair the equipment so long as you are committed to paying monthly payments without delays. Others have a policy stating that as long as the equipment damages in your hands, you should pay for its repair.
You should know the period for which you are planning to lease. When starting a business, it is possible that your business will have to lease equipment for long before it can be in a position to buy its own. On the contrary, something can crop up and need your business to have equipment that will be useful during the time the project runs. It is not wise to buy equipment you will use shortly. Knowing the length you should lease helps you to enter into the right agreement.
You should inquire about tax compliance. Unless otherwise stated, a lessee is needed to hand over the amount needed to pay taxes to the vendor who in return makes the payment. However, it is good that you ensure that this is indicated on the contract because the vendor can omit filing taxes or making payments and the responsibility of paying penalties and interests be put on you.
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