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Equipment Financing Quote Checklist
Two quotes with the same monthly payment can cost very different amounts. Ask these questions and write down the answers.
The deal
- Is this a loan, a lease with a purchase option, or a lease you return? What does the contract call it?
- What is the rate, and is it quoted as an APR, a money factor or a lease rate factor? Ask for the total of all payments.
- How long is the term, and are payments due at the start or end of each period?
Up-front and hidden costs
- What is due at signing? Down payment, first and last payment, security deposit, documentation fee, origination fee.
- Is sales tax financed or paid in cash?
- Are delivery, installation, training or warranty bundled into the price?
The end of the deal
- On a loan: is there a balloon payment? What is the payoff if you want to pay early, and is there a prepayment penalty?
- On a lease: what are your options at the end (return, renew, buy)? How is a purchase price set? What are the return conditions, hours or usage limits, and what do you owe if the equipment is worn?
- What happens if you want to end the lease early?
Risk and protection
- What does the lender or lessor claim as collateral? Is there a personal guarantee?
- Who is responsible for insurance, maintenance and taxes on the equipment?
- What are the late fees and what counts as default?