Ownership of Leased Equipment:
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An equipment lease is a contract between an equipment user, (The LESSEE), and an equipment provider, (The LESSOR), for the use of a specific piece, or pieces of equipment for a specific period of time and for a specific usage fee, (LEASE PAYMENT).
Ownership of Leased Equipment
At all times during the lease contract, the leased equipment is and remains the property of the Lessor who provides the equipment for use. In many cases, the Lessor will offer the equipment for sale at the end of the lease contract and frequently the Lessee will want to buy it at that time. The selling price of the equipment at that time must not be set until then in order to meet Federal Tax Guidelines for Leasing.
Some "Leases" automatically transfer ownership to the equipment user at the end of the lease, or do so for a nominal sum. These "Leases" are similar to loans and do not convey the Federal Tax or other benefits of a True Lease to the equipment user.
Qualifying for a Lease:
Qualifying for a Lease
An equipment lease is not a LOAN, however, like a LOAN, the decision by the Lessor to lease equipment to a specific user is based on that user’s ability and willingness to meet the obligation, in this care the total lease payments. That’s demonstrated by the user’s current financial condition and past credit payment history.