LEASE AGREEMENT

You should always read and completely understand the terms and conditions of your lease agreement. All agreements are not the same. Download (by clicking on the "LEASE AGREEMENT" hyperlink above) and review our one page lease agreement.  In order to read the document, you will need an Acrobat Reader if you do not have one. The Acrobat Reader can be downloaded free from:

Some leasing companies try to make their agreements so long and complex that no one can understand them. Our simple one page lease agreement is written in plain English with terms that everyone can understand.  You will be pleasantly surprised how easy it is to do business with Performance Capital as compared to other equipment leasing and finance companies.

Furthermore, don't be fooled by thinking that the lowest lease rate factor is the best deal for your company. The lease rate factor is important, but it may be just a portion of the overall transaction cost that you commit to when you sign a lease document. Additional fees may be built into a lease agreement. When you sign a lease agreement you agree to pay the monthly payment and to adhere to the terms and conditions of the agreement--and every agreement is different. There are some lessors that lure you into their web by quoting you a low lease rate factor and then they increase their yield by incorporating extra fees into their lease agreement and/or create end of term options that may cause you to pay a large sum of money to terminate the agreement.  Read your lease agreement!

Some terms and conditions you should try to avoid in a lease agreement are as follows:

1) Credit or commitment fees: Some lessors charge you a fee to process a credit application or a commitment fee to hold the credit open for a period of time once the credit has been approved. Performance Capital does not charge you a fee to process a credit application or a commitment fee to hold the credit open for 90 days.

2) Broker Fees: Some leasing companies are not full service lessors but simply are leasing brokers that charge a fee by marking up your lease rate factor or charge you a separate broker fee for completing the transaction. Since Performance Capital is not a broker our rates are very competitive and we do not charge any broker fees to our customers to complete a transaction.

3) End Of Term Option Stated As "Mutually Acceptable": Some lessors will provide you an option to buy the equipment at a mutually acceptable price vs. fair market value. A lessor that agrees to sell the equipment for a mutually acceptable price can charge you just about anything they want to charge. Whereas fair market value is a legally defined term that can be quantified. Performance Capital's options are fair market value or one dollar.

4) The Infamous ABC Lease: Some lessors try to lock you up forever and you can only escape by paying an inordinate fee. Watch out for end of term clauses that state you can exercise only one of three options: a) you can buy the equipment at a mutually acceptable price, b) extend the lease at a mutually acceptable price or c) return the equipment to the lessor only if you do a new deal with the lessor at a mutually acceptable price. This represents a costly loop you don't want to get into. Performance Capital gives you an option to buy the equipment at the end of the lease for a dollar or fair market value, extend the lease for twelve months or to return the equipment with no strings attached.

5) Fees To Pass Title To The Equipment: Some lessors charge you a fee to obtain clean title to the equipment in the event you exercise your option to purchase the equipment for a dollar or fair market value at the end of the lease. We have seen these fees as high as $250 or more. Performance Capital does not charge any fees to pass title of the equipment to you in the event that you exercise your option to purchase the equipment.

6) Put vs Option: If it is represented to you that you have an option in your lease to buy the equipment for fair market value at the end of the lease, make sure you have an "option" and not a "put".  A "put " may result in a lower monthly rate but requires you to purchase the equipment at the end of the lease. An option gives you a choice to either purchase or not to purchase the equipment at the end of the lease. You have an "option" to buy the equipment from Performance Capital at the end of the lease term unless you specifically requested a "put" structure.

7) Delayed Vendor Payment: Some lessors increase their yield by delaying the payment  to the vendor for 30, 60, 90 or more days after the lessee has accepted the equipment as satisfactory for the purposes of the lease.  This tactic increases the lessor's yield but many times creates an unnecessary hardship for the vendor. Performance Capital pays the vendor for the equipment the same day the equipment is accepted by the lessee thereby reducing the vendor's accounts receivable and increasing their cash flow.