When discussing a lease and choosing a leasing company to work with it is important to know what you are agreeing to and what kind of people you are working with. Below are several questions we strongly suggest you ask before making a decision. We also suggest you listen to the leasing executive you are asking to determine if these questions are dealt with easily or if they present a problem. If you don't get straight answers to all these questions, you should be careful.

Do you issue Pre-Approvals? If so, exactly what does it mean?

Some companies employ a tactic called the Pre-Approval. If you think about it, the term means before approval, but the way it's used it implies that an approval has been issued before one actually has. This is very deceptive and is most often used to get a lessee to send a check to the leasing company or to sign a set of documents before the leasing company is committed to doing the transaction. Be very careful of Pre-Approvals or Pre-Approved "Leasing Credit Cards".

How long is the approval valid?

Most approvals are valid for sixty to ninety days.

Do you require a deposit before you formally approve my credit application?

Some companies will require a deposit before they issue a formal approval. Typically, this is used to insure that the lessee is serious about doing a lease before the leasing company spends it's resources issuing a commitment. We typically to not require deposits on "normal" transactions under $75,000. We often require deposits on structured transactions, and we always require earnest money deposits on large transactions that require financial statements.

Are the deposits refundable?

If the transaction is approved and funds, the entire deposit is applied to the lease advance rental requirements. For a details ask your leasing representative for a copy of our fees policy.

What is the monthly rental amount?

Make certain what is included in your monthly payment. Some companies will quote you a lease payment based on the total equipment cost including sales tax but may try to add sales or use tax to your payment again. (a use tax is a monthly charge for the use of the equipment and is never charged in addition to sales tax).

What is the exact equipment acquisition cost used to determine this rental?

The exact equipment acquisition cost may include tax, shipping, training, warranties, and other 'soft costs'. You should know what is included in your lease and therefore exactly what the leasing company is willing to pay for. Any costs which are excluded will be your responsibility to pay.

How many Advance Rentals are required for this Lease?

Generally, most leases are quoted as "First and Last". This means your will be responsible for the equivalent of two monthly payments at the lease inception. Some companies will apply one or both Advance Rentals as Security Deposits.

What fees or other costs are we required to pay and how much are they?

Typically leasing companies charge a documentation fee and may charge a filing fee in special situations.

What is my Purchase Option?

Your end of lease purchase option is the amount of money that you may purchase the equipment for at lease end. This is typically stated in a dollar amount or a percentage of the equipment cost. Make sure your purchase option is stated in writing.

Exactly what must I do to exercise my Purchase Option?

Your rights and obligations regarding the purchase option should be spelled out either in the lease document or the purchase option letter which becomes part of the lease agreement.

Is there an Automatic Renewal clause in the Lease? If so what is the renewal term and what conditions trigger it?

Some Lease Agreements contain Automatic Renewal clauses. These are generally obscure clauses in your agreement which require the lessee to notify the lessor of some decision, usually their election to exercise their Purchase Option, at a very specific point during the lease term. If the lessee fails to comply with the requirement timely the lease term is automatically renewed for a specified period of time. BEWARE if the renewal period is greater than month to month. In some cases the renewal period can be a year, therefore, you will be responsible to make twelve additional lease payments.

About how many times has your company been sued by lessees or prospective lessees?

You can check the public records to verify the answer to this question. Although you'll probably need some help from your attorney to do so, it may be one of the wisest and best investments you can make. Lanier Funding has never been sued by a lessee or prospective lessee.

Are all leases the same?

No. Among other differences, there are three major types of purchase options at the end of the lease: $1.00, 10%, and Fair Market Value (FMV).

Can software costs be added to the lease?

Yes. Software and other 'soft' costs can be added to the lease. Software-only leases are also available.

Can service and installation fees be added to a lease?

Yes. Reasonable service and installation fees can be included in the lease.

What is the minimum amount of a lease?

Every company is different. Our minimum is $5,000

How much of an initial investment is required?

Two monthly payments are usually required at the start of a lease. Usually one is the first payment and the other is either the last payment or a security deposit. Often we only require one advance payment.

How long is the approval process?

Approvals are usually accomplished within twenty-four hours, for transactions under $75,000. Missing or incorrect information on the application will delay this.

What is required to qualify for a lease?

A simple application is usually all that is needed. Financial information will be required for leases over $75,000.

What is the difference between a lease and a loan?

A lease is an agreement to make payments for a specific amount of time for the right to use the equipment owned by the lease company. A loan is a financing vehicle to pay for equipment owned by the user of the equipment.

What types of leases are available?

We provide leasing programs for Businesses, Municipalities, and the Federal Government. Terms are 24,36, 48, or 60 (and in the case of hard assets 72)months. End of lease purchase options include Fair Market Value (FMV), One Dollar, and Ten Per Cent. Each of these structures have different affects on your balance sheet and taxes.

What is a lease?

A lease is simply an agreement by a customer (called the lessee) to pay a monthly rental payment for a specific amount of time for the right to use rental property owned by the lease company (called the lessor). The customer is responsible for insurance, maintenance, and all other costs of ownership.

For how long is the approval valid?

Most approvals are valid for sixty to ninety days.

Do you require a deposit before you formally approve my credit application?

Some companies will require a deposit before they issue a formal approval. Typically, this is used to insure that the lessee is serious about doing a lease before the leasing company spends it's resources issuing a commitment. We typically do not require deposits on "normal" transactions under $75,000. We often require deposits on structured transactions, and we always require earnest money deposits on large transactions that require financial statements.

Are the deposits refundable?

If the transaction is approved and funds, the entire deposit is applied to the lease advance rental requirements. For details ask your leasing representative for a copy of our fees policy.