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Customer Information Center
Truth in Equipment Leasing
- Repeat business and 100% satisfied customers, equipment suppliers, and lender banks is our #1 Corporate goal.
- To achieve this goal, we have found that eliminating costly and disappointing surprises is the key.
- We have created our industry's first "Leasing Disclosure Checklist".
- This list was developed by Bruce Forinash, Manager of Investment Leasing Company over the past 25+ years with the Company.
- Please call your leasing agent to review this list so that you and your boss know you have done your due diligence.
- Be sure to get other lender's written policies on these subjects!
- This list was developed as a result of actual transactions that were funded.
Leasing Disclosure Checklist
- Interim rent (an additional partial payment billed before regular payments start)
- Document fees
- Non-refundable earnest money deposit (first & last, or defined as security deposit, processing fee, or other names)
- Poor credit high-risk type lease non-refundable earnest money deposit
- Evergreen clause – automatic renewal of lease at end of initial term
- Early pay off fees
- Early payoff of a lease aspects. Non-cancelable but often lease co. Will say "an early payoff is ok and no penalty " but you should know how payoff is calculated
- Excessively high late fee
- Short grace period before late fee hits
- Change due date fee
- Origination fee
- Filing fee
- Title search fee
- Lease assumption fee
- Other junk fees such as your bank charging a fee every month to send us automatic lease payments
- Underlying lease "interest rate" is quoted correctly
- Security deposit up front not refundable
- FMV. Fair market value lease option warning items
- Lease sold to new firm
- You pay to ship back equipment at end
- Shipped items said to be defective or missing items
- "Pre-approved" letter in mail or by fax "out of the blue"
- No written quote or the quote is very low initially and approved at a higher rate
- Legal review fee
- Capital reduction vs. Security deposit vs. Advance payments
- Inspection fees
- Appraisal fees
- Re-broker fees
- Re-submission fees
- No residual letter
- Residual confusion: ignore factor & facts of lease
- End of lease warning small or non-existent on funding company. Or lease company invoice. Hoping you overlook this
- End of lease notice to lease co. Needs to be certified, not regular fax or mail letter.
- Income to suppliers from leasing companies
- Vendor, lessee, and maybe broker inflate equipment cost way above market and share the monies
- Rate too high - way above market for commercial loans, possibly by 3 times!
- Lender funds greater than 10-15% of equipment value in points to broker + broker's other earnings
- County property tax rate 2-3 times higher than actual
- County property tax charged on software when most municipalities don't require
- File blanket UCC1 on business without borrower's knowledge
Copyright Douglease Corporation, 2009, all rights reserved.