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How is a Lease Calculated?

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What is Leasing?

Leasing, often called lease financing, is a type of financing that allows businesses to acquire equipment or trailers without having to purchase them immediately. This type of contract provides a flexible and advantageous solution for businesses looking to optimize their cash flow while accessing the necessary equipment for their operations. Leasing is characterized by its unique structure, where a company (the lessee) rents an asset from a financing company (the lessor) for a specified period. At the end of the contract, the lessee has the option to purchase the asset for a predetermined residual value, extend the lease, or return the asset.

Note, in the case of Fincap, we do not allow the equipment to be returned.

The main characteristics of a lease include:

  1. Lease contract: The lease contract defines the terms and conditions of the lease, including the duration, lease amounts, obligations of the lessee and lessor, as well as the purchase option.

  2. Financed equipment: The assets that can be acquired through leasing include various industrial and commercial equipment, as well as vehicles. The industries concerned are numerous, ranging from manufacturing to services.

  3. Total financed amount: This amount includes the cost of the financed equipment, additional fees, and interest.

  4. Monthly payments: The lease payments are calculated based on the total financed amount, the contract duration, and the applicable interest rate. These regular payments are often tailored to meet the lessee's financial capabilities.

  5. Purchase option: At the end of the contract, the lessee can choose to purchase the equipment for its residual value, extend the lease, or return the asset. As mentioned, Fincap does not offer the option to return the equipment.

Components of a Lease Contract

Here are the main elements generally included in a lease contract:

  • Contract duration: The period during which the lessee will use the equipment. It can vary depending on the type of equipment and the company's needs.
  • Lease amounts: The monthly or quarterly payments that the lessee must pay to the lessor. These payments include part of the principal and interest.
  • Residual value: The amount the lessee will need to pay to purchase the equipment at the end of the contract if they choose to exercise the purchase option.
  • Maintenance and servicing conditions: The lessee's responsibilities for equipment maintenance.
  • Insurance: The lessee's obligations regarding the insurance of leased equipment.

Lessee And Lessor Obligations Regarding The Equipment

  • Lessee's obligations:
    • Pay the lease amounts as defined in the contract.
    • Maintain and service the equipment in good condition.
    • Take out insurance.
    • Inform the lessor of any damage or loss.
  • Lessor's obligations:
    • Provide equipment in good working order.
    • Ensure financing.
    • Provide administrative and sometimes technical support.

Financed Equipment

Our company finances a wide range of equipment for various industries:

  • Transport: Trucks, utility vehicles.
  • Construction: Bulldozers, cranes, excavators.
  • Trailers: Transport trailers, specialized trailers.
  • Excavation: Excavators, backhoes.
  • Garage and automotive: Lifts, alignment machines.
  • Forestry: Skidders, feller bunchers.
  • Agriculture: Tractors, combine harvesters.
  • Material handling: Forklifts, pallet jacks.
  • Industrial: Machine tools, compressors.
  • Medical: Radiology equipment, ultrasound machines.
  • IT and office: Servers, copiers.
  • Catering: Industrial ovens, refrigerators.
  • Dental: Dental chairs, dental radiography equipment.
  • Printing: Industrial printers, presses.
  • Production: Assembly lines, industrial robots.
  • Packaging: Packaging machines, palletizing systems.

Industries concerned

Leasing is aimed at a variety of industries specialized for their daily operations:

  • Transport and logistics
  • Construction and public works
  • Agriculture and forestry
  • Manufacturing
  • Healthcare and medical care
  • Technology and IT
  • Catering and hospitality
  • Automotive and garages
  • Printing and industrial production

Tools and resources for lease calculation

An equipment lease calculator is a tool that helps you estimate the monthly payment of a lease for equipment or machinery based on factors such as the cost of the equipment and the lease term.

To this end, our company offers an equipment lease calculator to help you estimate your monthly payments and make a decision.

To calculate an estimate of your monthly payments, simply fill in the fields on the calculator: "Financed Amount" and "Desired Term".

Here is an example:

Financed Amount: $50,000

Desired Term: 6 years (72 months)

Estimated Monthly Payment: $901.28

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