Smart Equipment Leasing Strategies - It's In The Fine Print

Source: EzineArticles
LeaseSpeak.com

The U.S. Department of Commerce continues to cite what business owners and financial managers already know: rapidly changing technology and cost-containment issues have spurred phenomenal growth in the equipment leasing market. Despite current economic difficulties, Global Insight, Inc., predicts that over $1.15 trillion in equipment will be acquired during 2009. More than $672 billion will be financed using loans, leases and other financial instruments.

Eighty percent of U.S. companies lease equipment to add or upgrade and stay in step with the changing landscape of business, especially in the area of technology. Fifty-nine percent of all businesses that finance equipment report they will lease computer equipment and 37 percent say they will lease software. Digital printing equipment is the most common equipment leased in every printing company.

However, not all equipment leases are the same. How can you protect your company? Whether your company is small, midsize or large, avoid technical obsolescence without overspending by learning to bring financial and technical matters into line with the business issues. By trimming hidden fees, it is possible to cut five to 15 percent from the cost of leasing equipment, whether it is a laptop or desktop computer, molding equipment, printing press, fork lift or digital copier.

The first step to paring costs is awareness. You hold the power of negotiating financial terms in any lease agreement; in turn, you hold the power to save hundreds, thousands--even millions--over the life of the lease.

Here are eight smart leasing strategies to save time and money.

1. Find a natural fit. There are many types of leases and leasing companies. All offer variables that affect the bottom line, and all contain benefits as well as potential pitfalls. Shop for the company that helps you get what you need when you need it--at the right price. In theory, the leasing company wants your business and will not jeopardize the relationship because of a few fine points related to financing. The manufacturer's leasing source may not offer the best priced financing package it often is an easy option to choose.

2. Reduce up-front costs and monthly payments. Focus on the best price for the equipment, not the monthly payment. Always negotiate with the equipment sales person as if you are a cash buyer. In that way you are assured that you remain focused on the asset price. The financing negotiation will follow later. The best monthly payments and terms are driven by the purchase price you negotiate.

3. Adjust the payment schedule. After the cost of equipment is negotiated, payment terms are also key to cost savings. Request the payment plan that fits your cash flow projections, whether it is monthly, quarterly or annual. If equipment operators experience a learning curve, structured lease payments may be helpful. Consider lower payments during the first three to six months.

4. Understand buy-outs. You may believe you can buy equipment at the end of the lease for "about 10 percent" while the lease states "in-place and in-use fair market value." The difference can be significant and costly.

5. Avoid hidden penalties. Penalties as high as 60 percent that lurk in return provisions, upgrades, deadlines, cancellations and automatic extensions are negotiable and avoidable.

6. Beware of the "Perpetual Lease." Chances are, you will not be notified that the original lease term has ended. The lease may automatically extend or renew, trapping you in added payments or a costly "Evergreen Lease."

7. Ask an expert. Consult a lease review expert to bring financial and technical matters into line with legal issues--before you sign.

8. Never too late to negotiate. Even if you are in a lease, there are still negotiable items such as late payments, end of lease purchase prices, relocation fees and return fees.

Look For Equipment to Lease Now

Used car dealers adapting to changing market

The following interesting article appeared in a USA newspaper. After reading it please provide your comments on whether you are holding on to your vehicle and just making repairs, or you are taking advantage of the incentives provided by new car makers, or you ar finding the best deals on used cars, trucks, SUV's or lease takeovers.

By GARY PINNELL
Highlands Today
Published: May 13, 2009

SEBRING - In a poor economy, new car sales decline, but used car sales improve.
Well, that was the traditional thinking. This is the new economy.

"These times are so tough that consumers are even discouraged from buying used vehicles," said Dale Buss, who blogs for industry watcher Edmund's Auto Observer. "This may be the worst year in two decades for used car sales."

There are two reasons, both linked to the recessionary economy:

•With a few exceptions - new car sales are down from 30 to 50 percent, according to a Reuters analysis.

•New car deals are so generous, they're actually cheaper than the one-year-old used version of the same model, said Edmunds.com CEO Jeremy Anwyl. "This is an unusual economic event," Anwyl said. "It can actually be less expensive to purchase a new car than a used car."

Economic adjustments

Used car dealers aren't giving up, they're fine-tuning. "We're lightening our inventory," admitted Jeremy Leach, a salesman at McPhail's Auto Sales, a lot on U.S. 27 in north Sebring. Used car sales are down 30 to 50 percent, Reuters said, a figure Leach agreed with. "People are fixing their used cars instead of trading them in," Leach said. "That's what I'm hearing from them."

Even so, a good used car is getting harder to find. "If you want something that's nice and clean," Leach added.

Used car dealers rely on new car dealers to call when they take a trade-in with too many miles. But because new car sales are down, there are fewer trade-ins.

Calls from new car dealers are down 50 percent, Leach estimated, and Alan Jay Wildstein said rental companies are holding their cars longer, too. Also, new car dealers - who sell used cars as well - are keeping used cars that were considered marginal in the old economy. "And cars are so much better than they used to be," Wildstein pointed out. He owns new car dealerships in Sebring and Avon Park.

Years ago, a car with 60,000 miles was considered near the end of its life, Wildstein said. Now Kia and Hyundai, for instance, offer a 10-year, 100,000 mile warranty. "We are wholesaling less vehicles," Wildstein said. "That being said, we're not keeping the secondary cars." "We want to have some higher mileage vehicles for customers who can't afford a one-owner, low-mileage car," said Stanley Wells, co-owner of Wells Chrysler in Avon Park.

At the same time, customers are shopping for older cars these days, Leach said. In previous years, McPhail relied on one- and two-year-old cars. Now, they're selling more three- or four-year-old models. "That's what customers want, so that's what we're carrying," Leach said. "Most of our inventory is under $10,000."

Better times

Two events have improved sales though, Wildstein said. Gasoline is $2 per gallon cheaper than it was six months ago, and as a result, customers have returned to buy light trucks and SUVs. And their trade-ins are worth more. "They were upside down," Wildstein said. Interpretation: when gas was $4.25 a gallon, even gently used SUVs and trucks often were worth less than was owed to the finance company.

"They don't have negative equity anymore, so that's made the market better on the truck side," he said. And because the market is stronger, dealers are again keeping used SUVs and trucks.
"Compared with new vehicles sales - which are at lows unseen in decades - the used car market is doing well," said Buss, observing another new economy trend. "Desirable used vehicles are becoming harder to find, pushing up their prices, while today's new cars are heavily discounted."

Smart Meter Ban Boggles Supplier

Attention Residential Tenants: The following article appeared in The Star and we would like to have your opinion on whether you agree or disagree with electric sub metering for your unit.

TheStar.com April 29, 2009
TYLER HAMILTON ENERGY REPORTER

Delay needed to protect tenants from landlords while ground rules developed, Smitherman says. Hundreds of green jobs will dry up or flow out of the province if the government doesn't act fast to lift a ban on installation of smart meters in apartment buildings, industry proponents are warning.

But Energy and Infrastructure Minister George Smitherman said that, without proper ground rules, the ban is necessary to protect tenants from opportunistic landlords.

One company feeling the effect is Almonte, Ont.-based Triacta Power Technologies Inc., which manufactures building sub-meters and was on a hiring spree until sales into Ontario's apartment rental market came to an abrupt halt last month.

"We have certainly had to put our growth plans on hold," said Rob Brennan, president and chief executive officer of Triacta.

Brennan said the impact is spreading beyond manufacturing to installers and electricians. "For Triacta and our partners, it would be in the order of 100 jobs, and it's probably four or five times that when I look at the rest of the industry."

Electricity in most apartment buildings is centrally metered. The total cost is shared by all tenants and included as part of rent, meaning tenants who use less electricity end up subsidizing those who use more, such as those who operate home businesses.

Smart sub-meters allow a landlord to track electricity use by tenant and charge for power use on top of rent that has been reduced accordingly. Individual tenants pay for what they use and, according to the industry, can benefit from incentives offered through conservation programs if they can reduce their energy use.

"Roughly 60 per cent of tenants end up paying less in total than they were previously," said John Macdonald, president and CEO of the Consumers' Waterheater Income Fund, which supplies sub-meters to landlords through its subsidiary Stratacon.

Brennan calculated that about 50,000 rental units in Ontario have had sub-meters installed over the past two years, on the assumption that new regulations would be introduced to protect tenants.

Those rules were considered but never passed, meaning installations have never been technically legal under the province's Electricity Act, at least according to Brian Hewson, chief compliance officer for the Ontario Energy Board.

Hewson issued a compliance bulletin March 24, calling for an immediate cease of sub-meter installations in apartments, at the same time confirming that installation in condominiums is permitted.

Tenant advocates argue the temporary ban is justified because some landlords were having the sub-meters installed without tenant consent. Where there is consent, "often it appears that this consent has been obtained through high-pressure sales tactics and misleading or incomplete information," according to briefing notes to the government from the Advocacy Centre for Tenants Ontario.

The group said rules must be in place to ensure that landlords are reducing rents fairly and getting proper consent, and that they don't off-load the cost of running inefficient appliances onto low-income tenants.

Mike Chopowick, manager of policy with the Federation of Rental-housing Providers of Ontario, said there have been "concerning" complaints against landlords but that's no reason to shut down the entire market. Chopowick pointed out that 26 per cent of Ontario's rental housing has always had sub-metering, going back to the 1940s and 1950s, so halting deployment now makes no sense.

If the government is serious about province-wide energy conservation, then it needs to get smart sub-meters into apartments, otherwise tenants won't be able to do their part, he said.
"We've been pressing for a while now for the government to have some sort of workable rules or framework in place."

Recently, the industry put forward a voluntary code of conduct in hopes of having the ban lifted until formal regulations are in place.

Smitherman said the government is working "longer term" to get those ground rules in place, but said he won't sacrifice consumer protection by rushing.

"Absent of good rules that have been developed with the interest of tenants, the government will not be encouraging the willy-nilly implementation of sub-meters," the minister said.

Brennan said he doubts such an approach will help the government reach its goal of creating 50,000 green-collar jobs over the next three years. Triacta now has some decisions to make, he said. "We're at a crossroads regarding where we grow next and where we go next."

Credit Crunch - Can you get out from under it?

If you’re concerned you won’t qualify for a lease, we believe that these fears can be easily overcome.

There are leasing agents/companies that have in house credit repair departments who will work with you to clean up your credit score and rating. After all, it’s in their best interest to do so. They want to do the deal…that’s how they make money. Next to that, they aim to provide comfort for their lenders to get paid every month. This is a very good option and well worth looking into.

If you don’t want to use their services and would rather handle the issue yourself, before you apply for a lease you have some choices:

Negotiate with your Credit Card Company;

Negotiating with a credit card company is not impossible to do. However, you must remember that they have company guidelines and their primary objective is to collect what is owed to them.

Many credit card companies have become flexible with adjusting the monthly payment they will receive due to the current state of our global economy. However, there is no guarantee that they’ll work with you. It will largely depend on what kind of customer you’ve been in the past.

When you contact your credit card holder stress the fact that you have been a model customer and that this is a temporary measure, and that you have every intention of living up to your obligations. Ask for a reduction to your interest rate so that you can actually make progress with paying off the debt. If they’re stubborn and won’t help you, ask to speak with their supervisor or be passed onto a department that can help you.

Debt Consolidation with a Home Equity Loan;

If you own your home and have available equity you could approach your lender to consolidate your debt and roll it into your mortgage. The lender will likely give you a blended rate but check out all your options. Don’t be afraid to talk to your lenders. They don’t want to lose your business. If they can work with you they will.

Credit Counseling Companies;

Consider working with a well known credit counseling service. Only use a reputable firm, preferably a not-for-profit company - check them out thoroughly! Lately, several stories are surfacing in the news about people paying so called “debt reduction” companies who pocketed their monthly payments due to the creditors/lenders.

A reputable credit counseling firm will negotiate directly with your lenders to get you lower interest rates and lower your monthly payments. They will collect money from you each month and pay your lenders. More often than not, a good credit counseling company can help you pay off your debt in just a few years rather than over a much longer period of time. This will save you a ton of money in the long term. What's more, they’re not establishing a new loan, but helping to repay what you already have in place.

Bankruptcy;

As a last resort you could opt for bankruptcy. This is probably not the preferred course of action; however, it will give you a manageable way to repay some of your unforgivable debts, even if you lose most of your assets. The terms of your bankruptcy will depend on your regional bankruptcy laws. Speaking with a local trustee will normally get you the answers to all of your questions.

Unfortunately, going this route, there really isn’t anything you can do to save your credit rating from disaster. Take heart though, over time it will get better and until then you will be considered a much higher credit risk and you’ll likely have to pay a higher interest rate on some things (for a while). But don’t let that stop you from leasing the item you want or need. Our recommendation would be to first speak with the leasing company’s in-house credit repair dept. and from there (if necessary), you can accurately determine the next best course of action.

Have you ever tried negotiating your debt? Have you ever used the services of a leasing company's in-house credit repair department?

Tell your story so that others can learn from your efforts.

It Pays to Lease a Used Lift Truck

Perhaps it’s hard to imagine making a significant acquisition in these tough economic times. Stocks are down everywhere, companies are folding, and layoffs seem endless.

Although, at times like these, most business owners will be focused on reducing overhead costs and scaling down to the bare bones, it’s equally important to ensure the best possible throughput with the business at hand, and this being the case, there is one business expense that can pay for itself quickly and multiple times over.

The addition of a used Lift truck can instantly enhance the productivity and employee morale for many different business types, and without breaking the budget.

A lift truck is a versatile piece of equipment (see different types below) that serves as a safe and efficient means of handling all sorts of products and materials for various businesses, ranging from construction, warehouse supply, landscaping, commercial storage and retail uses to name a few. They’re made to lift and transport heavy or awkward items, such as shipping containers, boxed pallets, or even loose objects like landscape boulders.

Based on the type you choose and the purpose use, (interior or exterior, light or heavy duty lifting and manoeuvring capacities), you should be aware that all lift trucks come with hydraulics for lifting, lowering and perhaps side to side shifting placement of loads, and may be available in different fuel types; natural gas, propane, diesel and regular gasoline, and currently the most environmentally friendly, “battery electric”. With basic preventative maintenance, a good quality used lift truck can provide years of reliable service without any problems.

Perhaps the most obvious benefit from any lift truck is the ability to increase throughput by enabling (with ease) the movement of bulk or cumbersome items, loading trucks, stocking tall shelves, quickly filling customer orders, and minimizing needless back injuries, employee lost time, insurance claims and premiums.

No need to worry if the cash outlay isn’t there, you don’t have to take out a bank loan to purchase a good quality used lift truck. Frankly, the best, quickest and simplest solution is to lease it and write the lease cost off as a full business expense. Besides, it may not have much (if any) remaining book value. And, all other related costs can be put into a monthly payment plan that fits with your operational budget. Since it’s used, applicable taxes are usually much lower and can be spread over the term of the lease in your monthly payments, along with all delivery, training and preventative maintenance contract needs.

Couple this with the many benefits of using the equipment for all your businesses material handling needs and it becomes very clear why you should lease a used lift truck rather than purchase it. It’s all about your return on investment (ROI).

Good quality used lift trucks are available through a variety of sources, including private sellers, wholesale dealers, manufacturers’ pre-owned inventory, and FREE to post online classified ad sites where all of these sources are likely to be found.

The general rule of thumb for shopping is no different than it is for any big ticket item, and that being the need for doing your homework (product research) before venturing out to acquire a quality used lift truck. Of course, the internet is the best and first place you should go for consumer reports and user forum comments to find out the preferred brands and why, compare prices, get different model specs and features etc. And, as with any significant acquisition, it’s important to read through all the fine print, as some deals may appear much better than others.

Lastly, when introducing a lift truck into your workplace, ensure that all your employees receive proper training (mandatory in some states and provinces). Check online for material handling equipment training courses available in your area. Remember, this is a cost you can most likely have built into your equipment lease.

Again, a good quality used lift truck can make a huge difference to your business. Not only with improving productivity and throughput but with increasing the morale of your entire workforce. And, without a doubt, leasing makes much more sense than buying.

Design types

The following is a list of the more common lift truck types. It is arranged from the smallest type of lift truck to the largest:

• Hand pallet truck
• Walkie low lift truck (powered pallet truck, usually electrically powered)
• Rider low lift truck
• Towing tractor
• Walkie stacker
• Rider stacker
• Reach truck (small forklift, designed for small aisles, usually electrically powered, so-named because the forks can extend to reach the load)
• Electric counterbalanced truck
• IC counterbalanced truck
• Sideloader
• Telescopic handler
• Slip Sheet machine
• Walkie Order Picking truck
• Rider Order Picking truck (commonly called an "Order Picker"; like a small forklift, except the operator rides up to the load and transfers it article by article)
• Articulated Very Narrow Aisle Counterbalanced trucks (commonly called "Flexi Truck")
• Guided Very Narrow Aisle truck - 'Man Down' (a type of reach truck designed for aisles less than five feet wide) and 'Man Riser' Combination pickcle Picker/ Stacker truck
• Truck Mounted Forklift / Sod Loader
  

Look for Lift Trucks now.

This article was written by LeaseArrangers.com, a FREE to post classified ad site for B2B, B2C, and C2C buyers and sellers of big ticket items like Equipment, Real Estate, Transportation and more. Lease – Rent - Buy - Sell