A lease is in essence an extended rental agreement under which the owner of the equipment allows the user (Example: Startups) to operate or otherwise make use of the equipment in exchange for periodic lease payments. In leasing terminology, the owner is the lessor, the user is the lessee. Equipment leasing is a popular option for companies of all sizes.
From computers and heavy machinery to complete offices, it is possible to lease almost anything for your business. Equipment leasing can provide a lifeline for cash-strapped startups in need of the tools of the trade. At the point where investors or conventional lenders are yet to pick keen interest in your business, leasing is a sure way of reducing your running cost.
It has both the good and not-too-fine sides, but the ultimate relief is that you won’t have to spend so much on pieces of equipment you would acquire to set-up your office.
While planning the launch of your startup or expansion of your SME, think of leasing equipment to get the business running for a start. Instead of admitting to yourself that what you have in terms of cash will not be adequate to bring your idea to life, approach equipment leasing companies to know the cost of such equipment you will need for float your startup.
Depending on the accord you reach with the equipment leasing firm, you will be allowed to use and (or) maintain the leased equipment over a certain period of time after which both parties will decide whether you pay a fair market value for the equipment or a fixed or predetermined amount.
As a startup, you will be benefit greatly from this kinda arrangee because, that huge amount you would have paid to acquire these vital pieces of machinery when your pocket is still slim would be broken down into bearable bits which you could conveniently swallow over time due to the healthy spread (not BlueBand butter tho!).
Remember how convenient a user-friendly, easily customizable payment processing platform like VoguePay will make it for your startup to make such payment in instalments. With the auto-withdrawal function on your VoguePay account, the determined monthly fee for the equipment leasing will be effortlessly debited from your account and paid into the lessor’s account.
Something delicious about equipment leasing that startups will continue to savor is that you are practically taking a loan without interest. Yeah, loan without interest! Like Yahoo! boy no laptop. You will start using the equipment without paying in full, in advance and the amount left unpaid will not attract any form of interest. And you can easily upgrade equipment once a lease expires.
This is unlike obtaining loan from a bank to buy equipment for your startup. Apart from the cost of running and maintaining this equipment, bank loan will attract interest over time. And the burden will become unbearable before you know it.
The flipside to this is that leasing can be an appropriate for any business at any stage of development. But when it comes to startup businesses, it is likely the owner will be obliged to put his or her personal credit on the line in order to secure the lease.
Things to keep in mind while you consider equipment leasing:
The person making the leasing agreement may be a broker and not be the korret source of the equipment, so be diligent enough to eliminate as much as possible middlemen in your equipment leasing process in Naija of today. Shine your eyes fams!
Be very very careful when it comes to the terms the equipment leasing service, especially when it comes to casualty insurance to cover equipment damage and responsibility when it comes to paying for handling repairs. Let it be clear from onset who will pay what when the equipment breaks down.
Or who pays insurance premium to prepare against major damage or theft of the equipment. If you need a legal officer to read and interpret the terms of service to you, please hire one for the meantime to avoid future regrets.
Beware of leasing firm that is Johnny just come. Be wise enough to deal with only those who have been in the leasing business for a while and have credible reputation. Don’t forget to use VoguePay auto withdrawal feature on our platform to make your payments in instalment especially for the equipment leased to you.