Leasing 101 > Leasing Wisdom > Impact on the Balance Sheet > Electronic Payment Convenience > Tax Savings > What is Leasing > Frequently Asked Questions

What kind of organization should use leasing?
Organizations of all sizes find benefits in leasing equipment. Signature serves businesses from the Agribusiness to Utility Co-ops.

What kind of equipment can I lease?
Virtually any type of equipment used in your organization may be leased. You may choose any make or model, new or used, available at your local dealer, or ordered through Signature Leasing.

What's the difference between a lease and a loan?
Rather than money, a leasing company lends the use of equipment or machinery. The individual or company leasing an asset has no ownership stake in the asset at any time during or after the lease (unlease the lease is a capital lease). In addition, the lessee only pays a periodic lease rental or payment. There is no interest rate involved with that lease payment; rather the lessee is paying a usage fee. Finally, the lessee will typically treat a lease differently for accounting and tax purposes.

What are my obligations for the equipment (such as insurance, taxes and maintenance) during the lease?
The individual or company leasing an asset of any kind has a non-cancelable obligation to pay the rentals in a lease, and must pay all taxes, insurance premiums and maintenance costs related to the equipment throughout the term of the lease.

Can I upgrade the equipment or add equipment under this lease?
The ability to easily upgrade equipment is one of the advantages of leasing. Leasing with Signature does not lock the user in to obsolete equipment. The upgrade is simply "rolled into" the existing lease. Signature may adjust one or more of the components of the lease including term, residual, and rental payment to account for the cost of the upgrade and the additional life of the upgraded leased asset.

What is the total lease payment and are there any other costs that I could incur before the lease ends?
Generally, the customer is responsible for the lease payment plus the lessee pays operating costs as if the asset was owned. Operating costs include maintenance, sales and property taxes, license, registration, and insurance. There is occasionally a special usage fee built into the lease that Signature bills to the customer on certain types of equipment. This usage fee is discussed with the customer and agreed upon at the beginning of the lease term.

What happens if I want to change this lease or end the lease early?
Signature Leasing handles changes and early terminations on a case-by-case basis. A Signature lease is non-cancelable; therefore, the customer is fully obligated to make all payments under the lease over the entire lease term. Signature, however, tries to work with the individual customer to make changes and terminations, as business requires.

What are the procedures I must follow if I choose to return the equipment?
Notify Signature 90-days prior to the end of the lease term that customer will be returning the equipment. Inspect the equipment to ensure that its condition is the same as when the lease was initiated, excepting normal wear and tear. Make repairs if needed. And finally, deliver the equipment to a location specified by Signature Leasing.

Are there any extra costs at the end of the lease?
Signature Leasing charges a remarketing fee for TRAC equipment it sells to a third party (not to the customer). Other than that fee, which currently is $100, there are no fees charged at lease end. However, if the equipment has excess or abnormal wear and tear, the customer would be charged to fix or adjust for that problem.

What happens to the equipment at the end of the lease?
At the end of the lease, equipment may be purchased by the lessee, returned to Signature Leasing for remarketing, or the lease may be renewed. All Signature Leasing leases have end-of-lease purchase options. The option varies with the type of equipment.