When money allocations are being made when starting a business, buying equipment needs high amounts which entrepreneurs may not have at the moment thus opt to lease. It is crucial to check the terms of a lease to get the best deals. You should apply the below guidelines when leasing equipment.
Talk with your vendor what you should do when the lease is expired. In order to avoid instances that put you in confusion, you should inquire what a vendor expects from you when a lease contract expires. Some companies need that you give an early notice or else the contract will be automatically renewed. Check if it is possible for you to buy equipment you have proved to satisfy.
Discuss the lease termination policy. In many occasions, the period of the lease expires after 6 months. However, you may find it necessary to opt out before 6 months are over either because you acquired your own equipment or the equipment leased does not meet your specifications. You should know if the policy of the vendor allows such termination and what you are needed to do.
You should inquire who will pay for repairs. Before settling for equipment, it is wise to ask what you are supposed to do in instances where equipment gets damages under your care. Various vendors use different policies regarding repairs with a number taking the responsibility to pay a certain percentage of the amount used to repair the equipment so long as you are committed to paying monthly payments without delays. Others have a policy stating that as long as the equipment damages in your hands, you should pay for its repair.
You should determine the time for which you will lease. When setting up a business, you are more likely to need to lease equipment for a longer time before you can buy your own equipment. On the contrary, something can crop up and need your business to have equipment that will be useful during the time the project runs. You may not consider buying equipment that will be useful over a short period. Determining the duration you will need the leased equipment will help you to choose the right contract.
You should talk about tax compliance. In many instances, the vendor is held responsible for making tax payments and the party leasing to compensate the amount the vendor pays. However, it is good that you ensure that this is indicated on the contract because the vendor can omit filing taxes or making payments and the responsibility of paying penalties and interests be put on you.