In its simplest terms, a lease is a contractual equipment usage agreement between the equipment owner (lessor) and the equipment user (lessee). The lessee pays the lessor a monthly lease payment for the rights to use the equipment. The amount of the monthly lease payment is a function of the original equipment cost, the length ("term") of the lease, and the lessor's cost of funds. Other components of the monthly lease payment may include property taxes, sales/use taxes, insurance charges, and any other expenses associated with the transaction such as maintenance charges and fees for documentation and filing.

The expected value (or residual value) of the equipment at the end of the lease term is also taken into consideration in the pricing of most leases. A higher anticipated residual value usually translates into lower lease payments for the lessee.

Here is a brief over view of the many different types of ILIASuisse offers:

Finance Lease (also called a "Conditional Sale"):

The finance lease combines some of the benefits of leasing with those of ownership. Payments are spread over a period of several years and often represent the full value of the equipment.

The advantage of a finance lease is that you have the opportunity to own the equipment at the end of the lease, generally for a minimal payment, such as $1.00, or for a small percentage of the original equipment cost.

True Lease (also called a "Tax Lease"):

Under a true lease, the lessor is the legal owner of the equipment. For that reason, this type of arrangement can be particularly attractive for companies and professional practices acquiring equipment that is vulnerable to technological obsolescence, such as computers.

A true lease gives you a lower monthly payment for a given piece of equipment than a finance lease would, and in some cases, your business can claim the lease payments as tax deductions.

You have three options at the end of the lease term. You may purchase the equipment for its fair market value, continue to lease it, or return the equipment to the lessor.

Operating Lease:

An operating lease is generally for a short term (typically three years or less) and is often used with high-tech or other obsolescence-prone equipment. In this type of lease, the lessor typically takes a significant residual position in the lease pricing, thereby bearing more of the risk of ownership. This, in turn, allows a lower monthly payment for the lessee.

Operating leases may qualify for "off balance sheet" financing for the lessee, in that the lease is recorded neither as an asset nor as a liability. In addition, the lessee has no further obligation with respect to the equipment once the conditions of the lease have been fulfilled. As with a tax lease, the lessee usually is given the option to purchase the equipment at fair market value. You should check with your accountant to learn if your leasing arrangement can qualify as an operating lease.

Skip Lease:

A skip lease has a repayment schedule that includes months when no payment is made (and no penalty is assessed). Ideal candidates for this type of lease are organizations that need a flexible repayment schedule such as seasonal businesses (agricultural or recreational services firms, for instance) and school systems.

60- or 90-Day Deferred Lease:

A 60- or 90-day deferred lease can be structured as a finance lease or a true lease. There is usually one advance payment required, and the next payment is not due until the second (60-day) or third (90-day) month of the lease.

This structure is useful for businesses that acquire income-producing equipment that takes a few months to begin generating revenue.

Pre-Paid Purchase Option:

This type of financing enables you to significantly reduce your monthly payments by pre-paying a percentage (10%, 15%, or 20%) of the equipment cost. At the end of the lease term, the equipment is yours for a payment of $1.00.

We can help you determine which type of lease makes the most sense for your business. As you can see, there are a number of variables that have to be considered, not the least of which are how you run your business, what your plans are for the future, and how you intend to use the equipment you're about to acquire. We'll work with you to make sure you get the lease that's right for you.

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