Frequently Asked Leasing Questions

Flexibility examples:

Q: Do you have the ability to be flexible in the financing terms of the schedule? Examples: monthly vs. annual payments, 32-month vs. 36-month leases, 24-month leases with a 24-month extension with a rate not to exceed, or step leases. Please list any terms that would not be acceptable. 
A: Yes, AEL is infinitely flexible. No terms would be unacceptable, provided that the term of the lease did not exceed the useful life of the equipment. To the extent operating lease treatment is still applicable and desired, of course, the term could not exceed 75% of the useful life.

Q: What is the process of setting up a new equipment schedule?
A: AEL would tailor the process to meet the needs of the client. Normally, a master lease line of credit is established and monthly or quarterly schedules would be used. A lease coordinator at AEL would work with the customer's lease coordinator, first identifying the equipment and placing it on an exhibit to the schedule. The customer usually issues the purchase order and assigns it to AEL for payment. Upon delivery of the equipment and acceptance by customer, AEL funds the schedule.

Q: Generally speaking, what length of time are the lease schedules typically open? Is that timeframe flexible?
A: Schedule funding periods normally range one month to six months. Most common is quarterly, but AEL is flexible.

Q: Can the length of time a schedule is open be extended once that schedule has been opened?
A: Yes.

Q: When a manufacturer or vendor invoices the lessor for equipment, are those invoices forwarded to the lessee for approval before payment is remitted to the manufacturer or vendor?
A:  Yes. AEL can include any procedures the customer wants to administer a leasing program. Most customers, for example, issue purchase orders directly with the vendor and then assign that purchase order to AEL for payment. Lease schedules and equipment detail are posted on AEL's online processing system which allows the customer and AEL to work closely together on leasing programs.  

Q: Do you provide serial number substitution for returned equipment? Is there an associated cost with this? 
A: Yes, provided that the swapped items are equal or better than the originals. There should be no extra charge; however, the customer would need to provide a reconciliation report, certifying that the substitution was like-kind equipment from the same manufacturer.

Q: Do you send the lessee a notice of a pending end of term lease for lease schedules? If so, how far in advance do you send the lessee these notices?
A: Our lessees have access to AEL's online lease management tool. With this tool, the customer can see all schedules, equipment and lease maturities.

Q: Do you allow for end of lease decisions by the lessee as to whether or not they intend to extend the lease for a certain amount of time, go month to month, return the equipment, or purchase the equipment on a less than all basis? Is there a “window of opportunity” for the lessee to make this decision? If so, what is that “window of opportunity”? Is there an increase in the lease factor rate for this opportunity?
A: AEL can set up a lease program to cover ANY flexibility or non-standard documentation or procedure a lessee requires. The end of term "window" is the final year of the lease, through the notification deadline.