Risks of equipment leasing

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Leasing has not only obvious advantages, but also disadvantages, which is why its use can be risky.

There is no early repayment. If you take out a loan, you can repay it early when additional funds appear. The lease term is fixed - the lessor can change the terms at the request of the client, but is not obliged to do so.

The property is owned by the lessor. The buyer acquires the property only when the entire amount specified in the lease agreement has been paid. Until then, he must obtain the consent of the lessor to perform certain transactions with the property.

Availability of an advance payment. In many cases, obtaining property on lease requires an advance payment, which can reach 50% of the cost of the property.

The buyer may be required cameroon email list to insure the property. Sometimes the insurance is taken out by the lessor and taken into account when calculating the lease payments, but most contracts provide for the lessee to insure the property. This mainly concerns real estate or transport leasing.

The property may be repossessed for non-payment. If making monthly payments is difficult, you can try to agree on other leasing terms. However, the lessor is not prepared to make concessions all the time: if the payment schedule is violated further, the property may be returned to the owner without any compensation.

Property may be confiscated in the event of the lessor's bankruptcy, even if payment has been made almost in full.

Frequently asked questions about equipment leasing
So, we figured out how to lease equipment. Compared to a standard loan, this option is more attractive, as it provides much more favorable conditions. It is especially worth noting the opportunity to save on taxes and achieve favorable terms of the transaction. The company can even completely replace fixed assets with subsequent payment of the cost of the new equipment in equal parts before the end of the contract.

Why is sale and leaseback necessary and can it be arranged for special equipment?
This method is used to lease expensive special equipment when, due to certain circumstances, it is wiser not to take out loans secured by property. In this case, the property in ownership is sold to the leasing company and then rented from it under a leasing agreement.

What is the maximum age of used equipment that can be leased?
It should not exceed the maximum service life specified by the manufacturer. Each leasing company offers its own terms. For example, Realist Bank allows contracts to be drawn up for property no older than 25 years.

Is the advance payment included in the lease agreement amount?
Yes. It also takes into account the redemption payment, periodic payments, insurance costs, interest for using the leased property, taxes, etc.