How about leasing?

[RaGe]

I've heard many fine members of this even finer forum recommend leasing as a good and fast way to get gear that one couldn't otherwise afford (yeah, you know, I wrote that song for Britney and she paid me ...uh, in "nature"). Soooooo, how does it work? Do some stores specialize in leasing? What are the general terms of the contract? Is it really as simple as it looks? Will I get to (re)produce with Jessica Simpson?

[lwilliam]

I was unsuccessful in even getting a call back from the leasing company recommended by my local MI dealer. Probably just a flakey leasing company... The little bit I know seems to require that you have a business license, tax ID number, and have been in business for at least two years. If anyone knows of "personal" leases vs business leases, I'd sure be interested. My credit is very good. ------------------ Larry W.

[Mats Olsson.]

So far, I've had only good experiences from leasing. First leasing I did was mid-eighties and can really reccomend it if you are getting gear that will get you more jobs and/or $$$. Talk to a tax advisor before you decide on what kind of leasing to get, where you operate it might make a big difference. FWIW: In Sweden the tax system makes it very smart for companies to lease. Some companies have even sold their inventory to leasing companies and then they lease "their own gear". All the stacks of cash they got from the leasing company they have often invested in other industries. /Mats

[Joe McDonough]

Before working for MusicPlayer.com I spent about five year selling companies leases (this doesn't mean I'm an expert or anything though). Anyway, high-tech equipment that depreciates quicky are great things to get on a straight lease since you probably won't even want the equipment after 3 years. The most important thing about setting up a lease is the buy-out at the end. If it's a FMV (Fair Market Value) Lease, you will be able to write off the full monthly payments at the end of the year. If it's a 10% or $1 buyout (the two other most popular leases) you will only be able to write off a certain amount and will have to check with your CPA about that. You're quotes of coarse will have a much lower monthly fee with the FMV buyout. Most leasing companies will not lease software though since it cannot be re-sold, but a DAW should be OK. Note that some leases have restictions for moving the equipment and all force you to imsure the equipment. There is also a lot to consider between leasing and getting a bank loan. A bank loan will have a better interest rate most likely but there are certain benefits to go with a leasing company such as the strict covenants a bank loan comes with and being able to use your bank credit for other purposes like cash loans. A typical $30,000 lease will probably be quoted in the neighborhood of 11-14% but there are many leasing companies (I worked at first for one) that do not care about usary laws and will write leases at interest ratea well over 20% in hopes that you cannot run the rate, so watch out. Also, it's not always a great idea to take a leasing deal from the equipment vendor if they have one offered from an outside leasing company. It often means that they're getting points for the referral and guess who's paying for those points... If anyone has some specific questions that I might be able to answer, my email is jmcdonough@musicplayer.com Joe McDonough MusicPlayer.com This message has been edited by mcdonough@musicplayer.com on 10-05-2001 at 05:30 PM This message has been edited by mcdonough@musicplayer.com on 10-05-2001 at 09:11 PM This message has been edited by mcdonough@musicplayer.com on 10-05-2001 at 09:12 PM

[RaGe]

Thanks Joe for this very informative post. I am emailing you for further details.