Cash Flow Considerations on an Equipment Lease

You have to consider cash flow when you are considering an equipment lease. A lease is often the best way to mitigate a tight cash flow in the startup phase of your business. There might just be even more leeway than you think in a lease.

Standard Lease

A standard lease typically requires the first and last payment up front, and then equal payments for the term of the lease. The lease term is likely anywhere from 2 to 5 years.

Step Up Lease

A step up lease is sometimes structured around higher priced equipment, such as digital copiers or printers. Payments begin at a very low level and then step up over the course of the lease to a higher, regular payment. The step up lease is designed to help startups receive the latest equipment without adversely impacting cash flow.

Deferred Payment Lease

A deferred payment lease usually offers the lessee a period of time, typically 90 days, before the second payment is due. Therefore, a copier lease might featured a deferred payment to allow a startup business to generate revenue.

There are a variety of options at the end of each of these leases. If you're considering an equipment lease, consider the Graphic Savings Group.

Equipment Leasing By the Book

We hate to give you homework, here at Graphic Savings Group, but if it helps your bottom line, then we're all for it.

Here are a couple of books, all of which are available at Amazon, that talk about equipment leasing and cover the basics.

The Complete Equipment Leasing Handbook by Richard Contino. This book has simple, straightforward explanations of leasing equipment terms and contract obligations. It tells business owners what to watch out for and what to look for.

Equipment Leasing (4th edition) by Peter K. Nevitt & Frank Fabozzi. This is not light reading; but it is the most comprehensive take on equipment leasing that is available. Equipment lease contracts might seem light in comparision after finishing this text, but it is worth the read.

These two texts are the best of the lot. Excerpts are available on Amazon. If you would like to learn more about leasing equipment, please visit Graphic Savings Group.