At SPAR we want to make sure your leasing experience is as simple and convenient as possible. Below you will find a vast amount of frequently asked questions from previous customers. This will hopefully help you feel more confident vis à vis leasing and help you prepare your purchase or application. If you still have questions, please feel free to reach out to us directly.
What Is a Lease?
A lease is a contractual arrangement between the lessee (the customer) and the lessor. You find the equipment, we buy it for you then you make fixed, regular payments, for a fixed term, with a purchase option at the end.
What equipment can I lease?
The term equipment is very vast in terms of what we can lease. From tablets to cranes and everything in between. Check out our leasable equipment (redirect to leasable equipment) page to learn more. If you are still unsure, please contact (redirect to contact) us and we will gladly answer your questions.
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. This is a considerable benefit for maintaining healthy cash flow for your business.
How is a financing rate determined?
The key considerations in determining the financing rate are:
- Number of years in business.
- If proper financial statements on the company are available.
- Information from commercial and personal credit bureaus.
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 as well as administrative fees. Other options are available upon request.
Will I be charged tax on my lease?
The applicable taxes are added to the monthly lease payment over the term of the lease.
Who can lease?
SPAR provides leasing services to any registered business.
If my company is new, can I still lease?
YES! Not only does Spar have great relationships with trusted partners, we also have our own portfolio. This allows us to work with new companies and we are often able to approve you when you may have trouble being approved elsewhere.
Exactly what has to happen before I receive the equipment?
Spar will review the credit information supplied on your application (redirect to application). Following that, one of our leasing consultants will review the process and information 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.
When does the lease start?
Your lease will begin upon signing of the lease agreement or receiving the equipment.
What are my options at end of lease?
There are several options for lessees at the end of the lease term:
- Continuing to lease;
- Purchasing the equipment;
- Returning the equipment to the Leasing Company.
Should you choose to purchase the equipment, the following options exist for the purchase price:
- Price based on Fair Market Value (FMV);
- $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 into 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 the lease.
Who services/maintains equipment?
Your vendor or supplier will service and maintain the leased equipment.
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.
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.
Can I cancel a lease agreement?
No, a lease is non-cancelable. However, we will work closely with you to ensure your needs are met with early buy-out, add-on, or technology refresh options.
Can I upgrade or add on to my leased equipment?
In most cases, yes. This is one of the key benefits of leasing. Our goal is to provide the solution you need, when you need it.
What is the range of deal size you will finance?
SPAR finances opportunities that start at $2000, up to multi million dollar deals.
How long will it take us to get a financing approval?
Assuming the documentation that is submitted is complete, we aim to return an approval or decline within 24 business hours.
What is the documentation fee?
During the lease process there has been incurring expenses such as credit reporting fees, lien searches, overnight delivery, administrative fees, PPSA filings, and papers required to be processed. A documentation fee is charged to help offset the expenses for your transaction.
What financing alternatives are available?
We can customize your leasing plan to fit your business requirements, deferred payments, seasonal payments, and no down payments.
What vendor can I order from?
You order from the vendor of your choice! By leasing through Spar, you can obtain equipment from any reputable vendor. Select your equipment and options, negotiate your best price and let us do the rest!
What type of information will I be asked to provide for on my lease application?
- Credit application (redirect to GET FINANCED)
- If you have a newer business you might also be asked to include further information:
- Financial statements;
- Balance sheets;
How long can I lease?
Most leases are 2-5 years, depending upon the type of equipment. However, longer and shorter are available depending on your situation.
Can I finance the remaining balance if I have placed a down payment on the equipment?
Yes, if you choose to make a down payment you can subtract that amount from the total owed on the equipment. For example, if you purchase $100,000 worth of equipment and make a $25,000 down payment, your lease would only finance $75,000.
Can I get a lease if I have had a bankruptcy?
SPAR is able to finance companies that have had a bankruptcy. This is one of the benefits of working with us. Because you will be viewed as a higher risk, you should expect to pay a slightly higher rate.