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Does a business need a specific agreement to lease industry-focused equipment in Orlando?

Florida – July 30, 2022

Depending upon the industry, and the stage of growth a company is in such as seed, start-up, growth, established and expanding, the ability to purchase outright may not be prudent.  Identification of a business structure and the number of employees and clients may be the starting place to determine if a lease equipment makes sense toward purchase as a business grows.  Although there are specific benefits to leasing equipment such as the ability to give it a trial run before outlaying large sums of money on equipment that may not be what the business really needs overall.  The types of equipment that businesses lease commonly includes machinery, vehicles, industrial appliances, furniture for office or restaurants, computers, servers, and copy machines to name a few.  An experienced business law attorney can guide companies at each stage of growth and assist them with decision on how they will spend their revenue, such as leasing over purchasing.

Capital lease versus operating lease.

  • A capital lease usually involves a purchase as the end of the lease term.  The business can identify pros and cons of purchasing their own equipment because a company balance sheet lists assets and liabilities and business equipment is considered part of a company’s assets.
  • An operating lease is utilized when a company does not include business equipment as assets and the lender owns the equipment and is responsible for depreciation of costs.  This type of lease may be used with the equipment has a short shelf life or a business is planning to replace the equipment at the end of the lease

Negotiating equipment lease options.

There are several issues that must be addressed in an equipment lease agreement, some are like general contracts and agreements, but an equipment lease should include clauses for:

  • The beginning and end date of the lease,
  • If there is any rent or deposit required and how much that will be,
  • Repairs and who will be responsible for them,
  • Loss and damage and who will be responsible for that,
  • How to list the equipment for tax purposes, and lending institutions,
  • Insurance in case the equipment is damaged or stolen, and
  • Steps that will be taken if there is a default where the terms of payment and rental are not being met.

A business law attorney can draft and review equipment lease agreements to avoid any conflicts and to point our areas that might be contested at some future time if each clause of the industry-specific equipment lease agreement is not clear.  When there is a breach of the agreement, a business lawyer understands legal avenues to cure the problem.

Hire a business law attorney.

Business owners should seek the assistance of an experienced business law attorney when preparing to acquire equipment for their business through an equipment lease agreement.  They can handle disagreements, address pending litigation and answer any questions a business owner has regarding the legalities involved in the equipment lease agreement.  Attorneys at Legal Counsel, P.A. will answer pointed legal questions and review necessary documents to determine if an equipment lease is best for their client.

Legal Counsel, P.A.

189 S. Orange Ave., Ste. 1800
Orlando, Florida  32801

Phone: 407-982-4321

Sources.

  1. Statutes & Constitution :View Statutes : Online Sunshine (state.fl.us)
  2. Statutes & Constitution :View Statutes : Online Sunshine (state.fl.us)
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