Equipment Lease Agreement- An Important Aspect Of Equipment Leasing
| By: Nelson Taylor |
Most of the companies in the United States- 80% as per the statics- are involved in leasing of equipment. Statistics indicate that equipment leasing is a $ 200 billion plus market. However, a large number of people overlook the importance of the most important aspects of leasingÂ- equipment lease agreement.
As this agreement contains terms and conditions governing lease of an equipment, this document assumes great importance. A person signing an agreement for lease of equipment (known as 'lessee') must exercise utmost care and ensure that certain significant aspects are taken adequate care of.
The foremost among these is identifying the right leasing agency (known as 'lessor'). This way the lessee saves time and is able to avoid lease transactions that are substandard. In case of a wrong lessor, the lessee may face various problems such as slow approval, failure of lessor in delivering equipment or delivering within the time-schedule, hidden costs, etc. This part of lease should be given paramount importance by the lessee.
While selecting the right lessor, the lessee must first look for experience, knowledge and reputation of the lessor. The lessor's ability to deliver, its business contacts and approach to the lessor-lessee relationship are also worth a look.
The next important step for the lessee is to identify the right lease. For this, the lessee should first analyze the requirementÂ- what are the attributes that the lease structure must have. In this process price of the lease, flexibility of the lease, type of equipment, the expected period for which the equipment is required, etc. should be taken into consideration vis-a-vis the lessee's requirements and the credit status.
The proposals for leasing come in various types. The fees and penal charges differ from one proposal to another. However, the common ones areÂ- commitment fees, facility or non-use fees, attorney fees, documentation charges, UCC financing statements, penal charges for late payment of the rental, termination charges in the cases of early termination of lease, etc.
The lessee will do well to carefully go through lease proposals and agreements to compare and find out the approximate charges. In the cases where a certain type of proposal calls for fees or charges that are not applicable to some other type of proposal, the lessee should try negotiating such fees.
Certain other features of a lease agreement like Renewal Period and End-of-lease Notice also deserve lessee's attention. The lessee must try to keep these periods as short as possible in the agreement. Usually this period is one to six months- three months being the average.Taking these issues among others into consideration will not only enable the lessee get the right equipment lease agreement but will also help save on time and money.
Nelson Taylor owns and operates http://www.fast-equipment-lease.com Lease Equipment
Article Source: http://www.ArticleBiz.com
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