Frequently Asked Questions
What is a lease?
A lease is an agreement to pay for the use of equipment for a specific time period for a specified amount. There are a number of advantages to leasing which makes it an attractive option for many businesses.
Shouldn't I own the equipment?
It is the use of equipment that generates profits, not ownership!
Who selects the equipment?
You do! There is full flexibility for you to choose the equipment and the supplier as well as to negotiate the acquisition cost.
Doesn't it cost more to lease?
Leasing is a practical way to use new equipment and compares favorably with other forms of financing, costing you about the same. That, of course, is no coincidence; the marketplace demands it and leasing rates are set accordingly.
It's probably much like you analyze and set your own pricing, you have to be competitive. With 80% of all businesses leasing, it can't cost much more; and with that size market they don't need to charge much less. Anyone who says that leasing always costs more is just as wrong as anyone who says it always costs less. The truth is it costs you about the same to lease equipment as it might to buy it. Businesses lease for cash flow and other reasons as cited above.
What's the interest rate?
Because you're not borrowing any money when you lease equipment, there's no interest rate on the lease like there would be on a bank loan. You can, however compare the cost to lease with the cost of a loan.
Which one costs more?
To accurately answer that question you have to look at your net-after-tax-cost. The "list price" may not tell the whole story.
How is leasing different from borrowing from my bank?
By borrowing from your bank or other sources of credit, you are immediately reducing your line of credit with that source and thereby eliminating the ability to draw from those sources in the future for other business needs. Also, a bank usually requires a 20% - 25% down payment and may even require additional collateral to secure the loan. Leasing provides 100% financing.
Is a down payment required?
Normally no down payment or equity is required. Most leases are structured with just the first and last payment in advance.
What is the interest rate?
A lease is an agreement to pay for the use of equipment for a specified period of time. We are not loaning you money; we are purchasing equipment for your use. Therefore, there is no interest rate in the usual sense of the word. A good analogy is the lease where your business is located. Your lease was negotiated for a specific time period and rent amount.
Are there any additional charges involved in a lease?
The only fee is the one time credit and documentation processing fee due at the inception of the lease.
What about taxes and insurance?
Most states charge a sales/use tax on the monthly lease payment amount. This amount will be added to your monthly invoice of the lease payment. In addition, the county charges a personal property tax on the equipment. We will pay this amount for you and bill you for it on an annual or monthly basis.
Can I cancel the lease and return the equipment?
The lease is a non-cancelable agreement for the full term of the lease. Metro Leasing does offer early payoffs without penalty!
During the term of the lease should you need to upgrade or add to the equipment, we can structure a new lease for you by paying off the existing lease and structuring a new lease for the total of the payoff and the cost of any new equipment.
What happens to the equipment at the end of the lease?
Depending on the lease structure you choose, you will have the option to return the equipment, continue the lease at the same monthly rate, or purchase the equipment for either the fair market value OR an amount you negotiated at the inception of the lease.
Who is responsible for the maintenance of the equipment?
As the lessee you are responsible to maintain the equipment in good working order and you receive the benefit of all "buyer" warranties.
Isn't leasing complicated?
Not at all. In fact, where a bank or conventional lender would require financial statements and mounds of paperwork, most leases can be approved up to $35,000 with just a credit application.
How do I apply for a lease?
It's fast and easy! Simply print our standard one page lease application, complete it, sign it and fax back to us at 402-391-8546.