FAQs


Frequently Asked Questions About Leasing

 

Financial FAQs

How much does leasing cost?
We’re thrilled to tell you that leasing is a very affordable option when it comes to equipment acquisitions. Your monthly payment is determined by the options you choose and can be tailored to fit your cash flow needs. If you want to know how leasing effects your bottom line when compared to other options, consider the benefits of Leasing vs. Borrowing, Credit and Cash.

How is the monthly payment calculated?
Monthly lease payments are determined based on a Lease Rate Factor: a periodic rental payment to a Lessor for the use of assets. The Lease Rate Factor multiplied by the Equipment Cost is equal to the amount of your monthly lease payment.

How do I, the lessee, account for the lease in my company financials?
The lease options you choose up front may have tax and accounting implications. Talk to one of our expert leasing consultants at 1-800-293-1119 as well as your accountant, to determine the best options for you and your business.

What effect does leasing have on my, the lessee’s, bank line of credit?
No money is borrowed when leasing, and as such, your bank line of credit is unaffected.

How will I be billed?
There are a number of billing and payment options, including an automatic debit to your bank account for each payment, or standard invoicing.

How much do I have to pay upfront?
A typical lease would require down payments of the first and last payments of the lease term up front. Other options are available upon request. Please talk to one of our expert leasing consultants at 1-800-293-1119 or e-mail us for more details.

Will I be charged tax on my lease?
The applicable taxes are added to the monthly lease payment over the term of the lease.

Are Capital Leases tax deductible?
For tax purposes, lease payments are a tax-deductible expense for the lessee and the lessor, as it is the owner of the asset who claims the Capital Cost Allowance (CCA). However, Canada Customs and Revenue Agency deem a lease to be a sale if any of the following conditions is present:

  • Title to the equipment passes to the user automatically by the end of the lease;
  • The lessee is required to purchase the asset; and
  • The lessee has the option, during or at the expiry of the lease, to acquire the asset on terms that a reasonable person would exercise.

If any of the above holds, the lease is a sale for tax purposes and the user of the asset claims CCA as a deduction, but not the lease payments.

Leasing Application and Approvals FAQ’s

Who can lease?
Easylease provides leasing services for any company, organization, association or professional.

If my company is new, can I still lease?
Easylease deals with a select group of funding partners that specialize in relatively new businesses and start-ups, and as such, we are often able to approve companies that have been in business for less than one year, pending credit approval. A security deposit may be required. Please contact one of our skilled leasing consultants at 1-800-293-1119for complete details.

What factors are used to determine credit worthiness?
A determination of your credit worthiness is based upon the following elements of your submitted lease application:

  • Length of time in business;
  • Bank references;
  • D&B and credit bureau ratings.

Exactly what has to happen before I receive the equipment?
Easylease will review the credit information supplied on your application. Following that, one of our skilled leasing consultants will review the process and documents with you, and prepare the final documents. After carefully reading and reviewing them, you will sign, date and return the lease documents. At this point, the equipment will be shipped directly to you.

General Leasing FAQ’s

When does the lease start?
Your lease will begin upon signing of the lease agreement.

What are my options at end of lease?
There are several options for lessees at the end of the lease term:

  1. Continuing to lease;
  2. Purchasing the equipment;
  3. Returning the equipment to the Leasing Company.

Should you choose to purchase the equipment, the following options exist for the purchase price:

  1. Price based on Fair Market Value (FMV);
  2. $1.00 Buy Out price, where you pay just $1 to purchase the equipment.

The end of term options are decided by you, the customer, and structured in to the lease prior to execution.

What if the equipment I receive has problems?
When your shipment arrives, you will be contacted to ensure that you receive exactly what you have ordered and in proper condition. After your initial receipt of the equipment, your vendor will work with you to troubleshoot problems or replace equipment as defined in your warranty. As the lessee, you will receive the benefits of all “buyer” warranties, as well as the responsibility for maintenance.

Who owns leased equipment?
The Leasing Company, as the lessor, is the owner of leased equipment until you choose to purchase the equipment at end of lease.

May I end my lease early?
If you choose to end the lease early, you may. However, it is only under rare circumstances that terminating a lease during its term is an advisable option. The cost to terminate a lease is based on the balance of payments, plus tax, and any payment arrears. Easylease makes every effort to maximize your lease termination options with flexible equipment upgrade programs.

Can equipment be purchased at the end of the lease?
Easylease offers lessees the option to purchase the equipment at the end of the lease. Should you choose to purchase the equipment, the following options exist for the purchase price:

  1. Price based on Fair Market Value (FMV);
  2. $1.00 Buy Out price, where you pay just $1 to purchase the equipment.

The end of term options are decided by you, the customer, and structured in to the lease prior to execution.

Who services/maintains equipment?
Your vendor or supplier will service and maintain the leased equipment.

Is insurance required on the leased equipment?
In order to protect both the leasing company and lessee, insurance is required on all leased equipment. Insurance protection can be included with your lease for a nominal fee.

If I have questions during the term of my lease or loan, whom do I contact?
One of our expert leasing consultants is standing by during regular business hours at 1-800-293-1119 to answer any questions you may have. Also feel free to sales@easylease.ca with your inquiry.

Here is a full glossary of leasing and financing terms