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Savvy business people know that getting the right payment schedule on a lease can make managing your business a whole lot easier. If you are new to equipment leasing a good place to start is the Equipment Leasing and Financing Association’s (ELFA) paper "10 Questions To Help Determine How Lease Financing Can Benefit Your Company." Long gone are the “Wimpy” days of leasing when a business owner went hat in hand to the bank to ask demurely "I’ll gladly pay you Tuesday for a hamburger today." Unlike Popeye’s friend Wimpy, today’s businessman and businesswoman knows that there are a broad variety of leasing options and many different payment schedules are available.

 

Some Leasing Payment Plan Schedules Include:

Monthly Payment Plan

Available everywhere but not the only payment plan available anymore.

Dealer Support Pricing

Used typically as part of a dealer promotion or year end clearance, the dealer provides you a low interest rate, or interest free purchase plan. It is always good to compare prices from multiple dealers to make sure the price of the equipment wasn’t raised to cover the cost of financing.

Payment Deferral Plan

Typically, you make a first payment and no payment (or, in some cases, a very low payment) for the first few months (e.g. a 90 plan would defer payments for three months). This plan gives you a chance to use the equipment to train or install or generate revenue prior to making a full monthly payment.

Seasonal Payment Plan

You choose a seasonal period (typically 3 months) when business is slow and during those months you make no (or low) payment. This program works great for seasonal businesses such as construction, ice cream shops, etc.

Security Deposit

You or the Dealer deposits a percentage of the lease up front (10-20%) with the lease contact, and "buys down" the payments. Excellent program for the customer to reduce the cost of funds and lower payments. A simpler version of this approach is the large down payment.

Semi-Annual Or Annual Payment Plan

This program might be right for you if your revenue comes in after a projects is completed or is impacted seasonally.

Step Payment Plan (6, 9, Or 12 Month)

This approach lowers the monthly payments initially 25-75% and raises the payment over a period of time to 100% of the monthly payment. An effective strategy when trying to keep expenses down initially.

 

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