Frequently Asked Questions

Here are some of the most commonly asked questions we get about leasing. If you have a question that is not answered here, or if you want more details, you can use the chat button on our website, reach out via social media, or email us at sales@priorityleasing.net.

How does a lease work?

A lease is a legal document whereby a leasing company buys equipment and leases it back to you over a set term with an option to purchase at the end of the lease.

Why should my business lease equipment?

There are many good reasons why a business should lease their equipment.  For example:

  • Leasing conserves your cash for emergencies and opportunities.
  • Leasing keeps your bank lines open for other expenses such as training, marketing, advertising and investing.
  • Lease payments are 100% tax deductible.
    Leasing spreads your payments out over time helping to manage cash flow.
  • Leasing helps you stay current with the best products for your business.
  • Leasing increases your spending power allowing you to get all of the right equipment when you need it.

What terms are available?

A lease can be any length of time between 24 and 66 months.  Typical lease terms are 24, 36, 48 and 60. But we can also structure a lease for ANY term between 24 and 66 months. 

How do I qualify?

You will need to complete a standard credit application.  If your business is new, or your corporate credit report does not show any borrowing or trade activity, we may require more information such as a financial statement.

Is there a down payment required?

Generally we ask for the first and last payment in advance.  In some instances, the financial situation of the company or the asset may prompt a request for a down payment.

What is the interest rate?

The finance charges built into a lease payment include the cost of borrowing plus administrative fees.   The cost of borrowing will vary depending on the following factors:

  • Type of business
  • Time in business
  • Financial strength of the business.
  • Nature of the equipment.

For example, a well- established engineering firm wanting to lease a photocopier will be offered a better rate than a new pizza restaurant looking for a dough mixer.

What is my buy out?

There are several buy out options available.  It’s important to know that the higher the buyout, the lower the lease payment.  Buyout options range from $10.00, to 10% (of the equipment cost) and FMV or Fair Market Value.   Often leases with $10.00 buy outs will be treated by accountants as a “finance contract” and not a lease.   Leases with 10% purchase options or FMV purchase options will be treated as “operating” leases.  Best to ask your accountant!

Can I match the lease to my busy season?

Yes.   Leases can be structured in many ways.  For example a ski hill or golf course may request a lease that has six months on and then six months off.  This helps the business make payments when they are making money.  And not make  payments  during their slow period.

Can I buy the lease out early?

Yes, a lease can be bought out at any time.  There is no penalty, but there is no real advantage either.  You will need to pay out the remaining payments and the buyout.

Can I lease part of the equipment and pay cash for the rest?

Absolutely.  If you wish to put more down than the standard first and last payment, that is fine.

How do I get started?

Our one page application gets the process started.  If more information is needed, a representative from Priority Leasing will call to discuss the additional information we need.