Leasing

Automatic Clearing House (ACH) - form of payment used to pay lease payments or pay vendors/customers for equipment, involves the transferring of funds between the parties’ bank accounts, the most efficient method for receiving funds

Addendum - an addition or change to an existing lease, usually an add-on for the lessee to acquire more equipment, can be done without going through the entire approval process again

Advance Payments - total number of payments required before the official term of the lease begins; traditionally 1-2 payments are required

Amortization - lease payments made to pay-off a borrowed amount gradually; once a lease has been fully amortized it is completely paid off

Corporate Resolution - a document signed by a head of a company allowing someone else within that company to sign documents on their behalf, applies most often to business leasing

Delivery & Acceptance Form - an acknowledgement form signed by the lessee stating that the leased equipment has been received, the lessee also accepts the condition that the equipment has been delivered in

Fair Market Value (FMV) - the price for which a piece of leased equipment can be sold for at the end of the lease term, an approximate price for the current value of the equipment at that given time

Fixed Purchase Option (Fixed) - an option determined at the beginning of the lease term.  At the end of the lease, the lessee is required to purchase the equipment at the predetermined rate; a common fixed amount is 10% of the original equipment cost

Invoice - itemized list of goods shipped usually specifying the price and terms of the sale

Landlord Waiver - a waiver that must be signed if a lessee rents their business space, this allows the lessor to gain access into the rented space if the lease goes into default and repossess their leased equipment, most frequently applies to business leasing

Lease - contract by which one obtains equipment or services for a specified term and a specified rent

Lessee - person or company that obtains property by lease, obtains ownership upon completion of payments

Lessor - person or company that obtains property by lease, owner of the equipment to whom payments are made

Municipal Lease - a special lease type that makes accommodations for state and local government agencies, this typically includes the use of purchase orders and annual payments

Personal Guarantee - a guarantee offered by an individual on behalf of the lessee, holds them accountable if the lessee defaults on their lease

Purchase Order - a type of invoice used to acknowledge a purchase being made

Residual Value - value of the equipment at the end of the term calculated by depreciation rates

Sale-Leaseback - a type of lease that allows companies to recover any money that they have already spent on recently purchased equipment

Skip-Payment Lease - type of lease that allows customers to customize their payments around their slow time of year.  This is ideal for any seasonal operation such as golf courses, ski-hills and landscaping companies

Upgrade - act or process of improving, enhancing or adding value to the current equipment

End of Lease Options - choices at the end of the leasing term, can include Dollar-Buyout, PUT, FMV and more.  Options vary by lessee’s plan for the equipment at the end of the leas