Frequently Asked Questions on Leasing

	What is A & B credit? How does leasing work? What is the percentage rate? How much are the monthly payments? What are the End Of Lease options? Why are there different types? How many can I lease? Why is Consumer Leasing so rare? Ask a specific question here What is A & B credit? The difference between good credit and bad credit is simple: do you have a more than 30 days late payment recently and have you filed bankruptcy in the last five years. If both of those are 'No' then you should be in the A to B category if you do have a credit history. Next, do you earn more than you owe? Basically, a lessor just wants to be sure you will be making your payments. [top] How does leasing work? Your purchase is funded by a lessor who actually owns the computer but allows you full use and access of it. Depending on the size of the lease, you may lease for as little as 12 months or as long as 60 months (usually large business contracts) while most leases are 24-36 months. [top] What is the percentage rate? Your percentage rate will be between 7 and 13% based on business or personal use and your credit history. The rates are very competitive due to the number of lessors that we work with. They vary due to the risk the lessor feals he is taking by making this transaction. [top] How much are the monthly payments? Most people lease for 3 years for $85-95 per month. You may save money in the long term by going with a shorter lease, like 24 months for about $125 or 12 months for about $210. The exact monthly payment will depend on the percentage rate offered you based on your credit rating and intended computer useage. Even a home-based personal business useage lease will offer a slightly lower percentage rate than purely personal use. [top] What are the End Of Lease options? There are three: Fair Market Value, 10% Buy-Out and $1 Buy-Out. Fair Market Value would be the value the lessor gave to the equipment when the lease is complete. At that time, you may return the equipment, pay the Fair Market Value (this is usually but not always set to no more than 10%), or continue leasing the equipment (you may also renegotiate the lease which usually results in a lower monthly payment). The same is true for both a 10% and a $1 Buy-Out but the amount is fixed at the time the lease is signed. Choosing a $1 Buy-Out option usually raises the monthly payments by $8-10 a month on a Personal Business Lease. [top] Why are there different types? Simply put, the three different types relate to the amount of risk the lessor feels he is taking based on their past experiences with leasing. The lower the risk, the lower the percentage rate. However, this is one of the few places where consumers and small businesses can lease computers at all and the rates are often better than a standard bank loan by as much as 7%! And, for business uses, leasing simplifies tax headaches with a straight expense rather than a depreciation table (please consult your tax consultant on exact benefits). [top] How many can I lease? Use the Quantity column on the order form, more than one order form, call or fax for additional systems but these are the limits with the application forms you can download. For a larger lease, please call. Personal Lease: varies Personal Business Lease: $24,999 Business Lease: $24,999 if less than 2 years old, $99,999 otherwise, and can include soft costs (like installation and software liscenses) [top] Why is Consumer Leasing so rare? Usually, only established businesses can lease computers from computer stores extending them credit as long as it is relatively proven to be risk-free. Edgewater Financial, Inc., has brought together a group of lendors willing to do smaller, higher risk financing in volume. Leasing, like renting, can require an entire additional department full of staff to handle the paperwork, follow-up, collections and so forth, and most financial institutions have been unwilling to hire that many additional staff to handle the additional work load when they already offer loans or other types of lending. [top]
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