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Leasing Handbook

Know more on Leasing...

Leasing Types

There are two types of leases available, the “closed-end lease” and the “open-end lease”.

Closed-End Lease
In the closed-end lease the residual value of the assets at the end of the lease is pre-determined before the lease is signed. At the end of the lease period, you have the option to purchase the assets for this price (plus a nominal administrative fee). This is the most popular type of lease today.

Open-Ended Lease
The open-ended lease works the same way as the closed-end lease except that the residual value of the assets is estimated at the start of the lease. When the lease expires, the estimate is compared to the actual market value of the assets, and, you guessed it, you pay the difference which can be substantial. This type of lease is seldom used today for non-commercial leases while most consumers find closed-end leases best meet their needs.

Terms and Definitions

IRR
The internal rate of return is a discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.

Cap Cost
Or Capitalized Cost is equivalent to the purchase price of the asset on a conventional asset loan. The cap cost is the price at which the dealer sells the asset to the leasing company and is negotiated between you and the onset dealer. This number includes the dealer’s cost on the asset plus a margin and is also used to calculate the monthly payment. The higher the Cap Cost the higher your payment.

Security Deposit
A Capital Reduction (Cap Reduction for short) payment is cash paid by you at the signing of the lease that is applied towards the capitalized cost of the asset. In other words, a cap reduction payment reduces the price at which the asset is sold to the leasing company and thereby reduces the monthly payment. If you are trading in a vehicle, the allowance for your trade is usually applied as a cap reduction.

Early Termination Fee
If for some reason you are compelled to break the lease, you will almost certainly be obligated to pay this fee. Depending on the wording of the lease agreement, this fee could be very substantial. Therefore, you should be sure to understand the terms under which the lease may be broken before you sign the contract.

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Why Choose Us

Other sources of financing often move too slowly to be effective, taking many days to provide an answer after reviewing a lease request. We understand you and your business cannot afford to wait too long. You require simple and efficient financing which is why we strive to approve your request with unparalleled speed.

We will work with you to find a plan that suits your needs and facilitate an equipment acquisition from the vendor of your choice. Our applications only require a limited amount of information and approvals are delivered quickly. You are our priority and our team is always available to help you.

Our experienced teams are experts in their field and depend on lasting relationships – they are invested in understanding your business.

We offer the flexibility and service that only a privately owned leasing company can deliver. M.I.S.S will look at almost all ranges of equipment acquisitions including used assets, private sale transactions, and sale-leaseback.  We are experts at structure transactions to match your businesses’ cash flow.

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