Lease Agreements – Know One, Know Them All?

Lease Agreements – Know One, Know Them All?
Unfortunately, No! Why aren't lease agreements actually standardized?

With loans and banking in general, we've grown accustomed to standardized contracts – and banks use the same terms and conditions.

It is therefore surprising that lease agreements and the fine print – the general terms and conditions – remain completely unstandardized to this day.

Depending on the leasing company and contract type (of which there are many), they may contain similar, but by no means identical, provisions.

And some provisions can be quite surprising.

Standard topics that should be clarified include, for example:
🔹Which payments/costs are due at which point in time?
🔹Can the contract be terminated – or more importantly, when must it be terminated?
🔹Is an external maintenance company required? Can maintenance be handled in-house?
🔹Can the leased machinery be moved to another location, including a foreign subsidiary or a customer's site? Does this constitute a sublease requiring a separate agreement?
🔹What about insurance?
🔹Is a change-of-ownership clause included? #Change-of-Ownership

Particularly noteworthy is also what is not in the contract:
🔹What happens at the end of the term?
🔹How and at what price does ownership of the asset transfer to me as the customer?

This brief overview is not meant to unsettle you.
All of these details can be easily clarified and addressed as needed.

Please keep in mind: leasing and hire purchase are excellent financing options with many advantages, and they are better suited than loans in a wide variety of situations.

At #LeasingPilot, we source the right contract types for each specific investment and are well-versed in the contractual nuances of the various leasing companies.

We are also happy to support your in-house or external legal advisors, helping to identify and resolve potential points of conflict in advance!


#Leasing #CFO #Treasury #LBO #PrivateEquity