Common Mistakes with Equipment Leasing

Sometimes small business owners and entrepreneurs hastily get equipment leases. Without being well informed, they run into problems. To help you to avoid a headache in the long run, here are the top mistakes business owners tend to do when they sign their equipment lease.

1. Having an absence of lawyers. Although it may seem like a costly endeavor, we highly recommend reviewing the lease contract with a lease attorney. It will help avoid bigger problems in the future if you take the time now to make sure the terms and conditionals are fair and legal.

2. Using short contracts. Although short contracts are quicker to read, long contracts will have the potential to discuss not just terms but other possible issues. If anything comes up, the issue will always go back to what the contract entailed.

3. Not considering long-term goals. Always think through the purpose of your equipment lease. Will you use the equipment when the lease ends? How long do you plan to use it?

4. Lack of communication. This is always a problem in every facet of life. It is very important to have open communication with your leasing company. If something is not clear or does not look correct to you, don't be afraid to ask your leasing company. Make sure that all issues are out in the open and clearly communicated.

5. Incompatibility with software and hardware lease. A software lease and a hardware lease are two different kinds of leases. Sometimes software does not always work on the hardware. It is very important to research this before you purchase your equipment.

Brad Harmon is the President at a leading financing company, First Star Capital (www.firststarcapital.com). Brad is a frequent contributor to online publications and newsletters, and is the author of this blog on commercial financing topics.