Financing Q&A
Why finance?
Financing has many benefits and is an attractive alternative to traditional borrowing. Take advantage of fixed payments and 100% financing of the equipment cost. Pay for equipment as it’s used to generate income. In addition, leasing helps you to conserve working capital and bank lines of credit. Leasing is a valuable cash management option. You don’t pay salaries in one lump sum, why pay for equipment that way? Is it more important to own the equipment or use the latest equipment available on the market?
Who finances equipment?
It’s quite common. 8 out of 10 U.S. businesses use lease financing to acquire needed capital equipment.
What is the process?
Fill out a simple one-page credit application and generally within a few hours you will have a credit response. Documents will be expedited to you. Upon receipt of signed documents, a purchase order is issued to the equipment vendor and your order is delivered. Once we confirm your equipment is received and installed, we’ll activate your lease.
How is my payment calculated? What is the interest?
Lease rates are different from interest rates. There is no actual “interest rate”. The monthly payment is based on a lease rate factor and is calculated based on the type of leasing plan you choose, the term and the cost of the equipment. However, on certain lease structures, such as $1.00 out lease, the interest rate can be calculated just as you would a traditional loan. This is a full payout lease that you own the equipment after you have made the last payment. Since there is no residual structured into the lease, an interest rate may be calculated. EFAs have an interest rate just as a loan does.
May I cancel the lease?
The lease is non-cancelable. However, you may arrange for a prepayment of the lease or upgrade to acquire more equipment.
Is there a prepayment penalty?
There is no penalty for pre-paying.
Isn’t leasing is more expensive than bank financing?
You need to compare “apple to apples”. The payments may appear different, but look a little deeper. Leasing doesn’t require a down payment or compensating balances like a bank. Our financing includes installation, maintenance, freight, and taxes. Lease payments aren’t tied to an index but are fixed for the entire term of the lease. We offer you an additional, and less restrictive, line of credit. Most importantly, we do not charge hidden points. When you compare all the factors, a lease is typically the same or lower “all-in” interest rate, but provides significantly more flexibility.
What does "fair market value" (FMV) mean?
It's an option to purchase leased property at the end of the lease term at its current fair market value. This only applies to a lease that is structured as a Fair Market Value (FMV) Lease. It’s also called a ‘tax lease’ offering that allows you to “expense” the entire monthly payment (verses depreciating the asset over its tax life and expensing the interest expense). The lease must include a fair market value purchase option at the end. This value can only be determined at the end of the lease using the then current “fair value” for an unbiased purchaser of the equipment.
Will I be able to choose my equipment vendor?
Yes. You determine what equipment best serves your needs. We simply request information about the vendor that will enable us to complete all transactions.
What if I already took delivery of the equipment?
No problem. Taking delivery of equipment doesn’t, in itself, constitute taking ownership. Actually paying for the equipment is considered ownership. And, depending upon the time that has passed since you paid for the equipment, you may still be able to lease it.
What if I already purchased the equipment?
You can still lease equipment you’ve already purchased (i.e., paid for) provided it’s been less than 120 days since the date of purchase and you’ve provided adequate documentation. This type of lease is called a "sale lease-back."
Can I receive the funds for the payment?
Only if you are leasing equipment that you have already purchased (i.e., a "sale lease-back").
What happens at the end of my term?
We will notify you of your end-of-term options at least 60 days prior to the expiration of your lease.
How soon can I get another lease?
As often as you need additional equipment
Do you have an "automatic renewal" clause in your lease agreement language?
No. We do not have an automatic renewal clause in our lease agreement language, because we feel automatic renewals are not in the best interest of our customers.
How long does the approval process take?
The vast majority of our customers receive initial approval for open lines of credit within a few minutes of submitting their application. Final approval is contingent upon reviewing the information submitted and verifying accuracy and authenticity. Once verified the credit line is formally established.
What should I do after I’m approved?
After you're approved, we need to gather specific information regarding the equipment your financing, as well as the vendor(s) supplying it. You will be provided with detail, easy-to-follow on-line instructions on how to complete your lease agreement.
Who actually pays for the equipment I’m financing?
One Place Capital pays the equipment supplier. Your monthly and end-of-term payments are then made to us until you satisfy the terms of the agreement.
How soon is the equipment paid for?
A One Place Capital Relationship Manager will call you to confirm that the equipment has been delivered and is working properly. Once this is determined, we will issue a check to the equipment supplier. This is usually within 2 working days of you receiving the equipment.
Can I charge my monthly payments to my credit card?
We aren’t able to process credit card transactions for monthly payments. However, we can set you up on a monthly debit to your checking account to automate the payment process.
Can my monthly payments be automatically withdrawn from my checking account?
Yes. You can request an automatic withdrawal agreement and we will set it up for you.
