Have you ever wondered about what is involved in leasing (or financing) equipment? I chatted with Danilo (Dan) Terra of Leasex Financial this morning and we covered lots of ground. Dan is quite optimistic about the current economy here in Alberta and is excited to see the growth that is happening with his clients. Having been an ex-banker Dan has been able to become a specialist in equipment leasing and financing and he shares his opinions, thoughts and advice on our Google Hangout.
There are a couple of terms that Dan spoke about including:
1) quiet use of equipment – the banks want you to use the equipment you are leasing as if you owned it
2) purchase option – this is the amount of money due at the term of a lease contract. Dan advised that many people exercise their option to purchase
3) sale lease back – a business may own some equipment and need to access cash and a sale lease back is a option for those business that want to access the equity they have locked up in equipment
Dan was also good enough to speak to some of the myths about equipment leasing including:
1) leasing is expensive – in some cases leasing can be cheaper than financing
2) 100% lease financing does not exist – in some cases a business can finance the entire purchase price of equipment
3) You have to deal with your bank – a common misconception is that a business needs to seek equipment leasing from the bank they deal with day to day
We chatted about the “black box” of equipment leasing including how interest rates and fees are paid for and how asking for an amortization schedule can provide you with insight into the true cost of undertaking a lease. Dan also mentioned a concept called “lease line of credit” which is something businesses should consider if they have an expectation of leasing equipment over a period of time.
Dan has quite a bit of experience and knowledge so if you need equipment leasing and financing options, he can be reached on LinkedIn (search for Danilo Terra) and on the web at www.leasexfinancial.com
“Ask questions and get to know who is handling your equipment leasing needs” – advice from Danilo Terra
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