Finimpact

Final Word

Leasing equipment is a good way for businesses to acquire expensive equipment without needing to purchase it. That makes leasing good for cash flow and popular for businesses that want the option to upgrade their equipment regularly. Before leasing any equipment, work with a lawyer to make sure the lease agreement is properly constructed.

FAQ

How is insurance handled in an equipment rental agreement?
The lease agreement will outline how insurance is handled, such as whether the lessee or lessor covers the cost.
Is it possible to get out of an equipment lease agreement?
In many cases, it is possible to get out of a lease agreement, but you may have to pay penalties. Read the fine print or consult a lawyer to see what your options are.
Where can I find an equipment lease agreement template?
You can find equipment lease templates online or consult a lawyer who may offer one.
How does a lease-to-own agreement differ from typical equipment rental agreements?
Lease-to-own agreements give the lessee the option to purchase the equipment at the end of the deal, often with a credit toward the purchase price for a portion of the lease payments. Typical equipment rental agreements don’t have that option.
Are lessees financially responsible for more than just their monthly lease payments?
Depending on the terms of the agreement, lessness might be responsible for things like routine maintenance and insurance costs.

About the Authors

TJ Porter

Written by: TJ Porter

Personal Finance Writer

I have in-depth experience in reviewing financial products such as savings accounts, credit cards, and brokerages, writing how-tos, and answering financial questions both simple and complicated.

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Kal Salem

Reviewed by: Kal Salem

CPA, PMP and Finance Consultant

A CPA and finance professional working with small businesses to educate owners and grow alongside their businesses. He holds a Masters in Accounting and a BS in Supply Chain Management. Owner at Salem CPA Services LLC.

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Somer G. Anderson Ph.D.

Fact checked by: Somer G. Anderson Ph.D., CPA

Accounting and Finance Professor

Somer G. Anderson has been working in the Accounting and Finance industries for over 20 years as a financial statement auditor, a finance manager in a large healthcare organization, and a Finance and Accounting professor at Maryville University.

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