Leasing FAQs

Q. Can my lease be cancelled or paid off earlier than original term?

A. You can upgrade or trade in your current equipment for new leased equipment before the expiration of the initial term (subject to credit approval). You may elect to have any balance from the old lease rolled over into the new lease.

Q. Why did you request a personal guaranty on my equipment?

A. ML Financial Services, Inc. makes fast credit decisions based on limited information on our credit application. We utilize publicly available information and have observed that credit bureaus are the most accurate. We have found that smaller businesses follow payment practices similar to those of the company principals.

Q. What is the interest rate of the lease?

A. With leasing, unlike bank loans, there is no interest rate as we typically think of them. It is more like leasing office space. You are paying to rent the equipment with the monthly payment based on the lease structure, the terms of the lease, and the cost of the equipment. There are many ways to structure a lease that do not exist with bank financing.

Q. What should I do in the event I encounter a problem with the equipment that I have leased?

A. The vendor (provider of the leased equipment) is solely responsible for any service or warranty issues. ML Financial Services, Inc.’s role is to provide leasing assistance to you, the same way a bank would provide financing of a car.

Q. When is my first payment due?

A. After ML Financial Services, Inc. has confirmed that the equipment has been delivered and you have returned all documentation, your equipment supplier is paid. This will trigger the lease payment, which will then be sent to you by the funding source. There may be a “catch up” payment requested called an Interim rent payment. This payment (if requested) typically covers the period between when your vendor is paid and when your first payment is due.

Q. What is a Documentation Fee?

A. This if a fee charged by the funding source for the work preparing and processing the documentation of your lease. It helps reimburse for the fees incurred with filing UCC-1 financing statements that may be required in your state. This is not to be confused with an expense deposit, which may be charged by ML Financial Services, Inc..

Q.What taxes do I have to pay on a lease?

A. In many states and some local jurisdictions the funding source is required to pay a use tax on each monthly payment. Since the lease payment was calculated in advance and because occasionally these rates fluctuate, this amount is billed separately. In certain states the full amount of the taxes is due at the inception of the lease. ML Financial Services, Inc. may ask that this tax be paid separately or depending on state requirements, may be incorporated into the equipment cost to determine the monthly payment. Many states also charge an annual tax on tangible personal property. This tax is the responsibility of the funding source. Since the lease rate does not include this cost, it is passed on to you, the lessee, in either a lump sum or spread over time in the lease payment. These costs change periodically and are not included in the calculation for the base monthly payment.

Q. What happens at the end of the lease term?

A. Unless you have chosen a fixed purchase option such as $1.00 buyout, you are responsible for returning the the equipment in good working condition within 30 days of your last payment due date. If you do not return the equipment, you are billed monthly. If you did choose a fixed purchase option, you must exercise the selected option within 30 days of the last payment due date.

Q. What are the tax benefits associated with leasing?

A. From the lessee standpoint, you may be able to deduct the monthly lease payment as a business expense on your tax returns. As always, with any tax matter you should seek specific advice from your tax professional or accountant. Unless you choose a $1.00 buyout option, you agree that the funding source holds legal title to the the equipment and is entitled to any tax benefits associated with ownership.

ML Financial Services, Inc.
301 Crawford Blvd. Suite 100, Boca Raton, FL 33432
Ph: (561) 367-7749 Fax: (561) 367-9855 Toll Free: 1-888-296-3322