The Biggest Mistake in Equipment Financing

Probably the most costly mistake we see businesses make in equipment financing is failing to understand end of term lease structures.

Granted, you're running a company, so where are you going to find time to become an expert on FMV's, $1 Buyouts, EFA's, 10% PUT's, and None's? And that's just to name a few.

Let's look at an all too common example..

You want to buy a piece of equipment for $75k, and you sign a contract for $1,600 per month for 60 months. You make your 60 payments and assume you now own the equipment free and clear. Except a month later you receive an invoice for some $20,000. This must be a mistake, right?

Maybe not..

You’ve probably found yourself stuck with what’s called a Fair Market Value (FMV) lease buyout. Meaning at the completion of your term you get the lovely options of turning the equipment back in or writing a massive check. Maybe you didn’t even know you signed a lease contract, or maybe you thought your lease was a simple $1 buyout.

There are all kinds of fine-print games that some finance companies play to arrange these end of term balloon payments, but the bottom line is your original interest just nearly doubled..

You don't have to be a finance expert to protect yourself, but you do need trustworthy professionals in your corner.

By taking a consultative approach, our goal is to be an extension of your team and someone you can trust and return to for the long haul (click here to read about vetting finance companies).

Get in touch with us today to learn how to avoid the above situation altogether.