One of the questions we frequently get asked is “what types of heavy equipment do you lease?” We generally lease a wide range of new and used heavy equipment/construction equipment ranging from 5k to 500k. Some of the equipment includes aerial lifts, air compressors, boring machines, backhoe loaders, dozers, as well as a wide variety of trucks and vehicles.
Another question we are frequently asked is the difference between a loan and a lease? In summary, a loan is the borrowing of money while a lease is a term rental agreement for the use of specific equipment. As a means of financing, loans generally involve a lot more paper work and can take much longer to complete. Lease financing is generally more flexible than a loan and can be completed in a few days without some of the restrictions loans can dictate. Factors which affect the lease payment include: time in business, type of equipment/vehicle being leased, size of transaction, length of term, and overall credit strength.
You have several options at the end of a lease, depending on the type of lease, including the following:
•Buy the equipment for $1.00
•Purchase the equipment for fair market value
•Continue to rent the equipment month to month or for a specific period of time (i.e. 3 months, 6 months, one year, etc.)
•Return the equipment to the lessor at the end of the term
It can be beneficial to establish a master lease agreement whereby additional equipment can be easily added to a lease in one document which will govern subsequent transactions. Under the master lease, the business will have schedules for each “batch” of equipment they finance over time with the lender. Schedules can be for different terms depending on what is appropriate for the heavy equipment being financed. If there is additional equipment or vehicles needed, you can simply add it to the master lease.