If you can't make the loan...Understand lease options

Every business lender needs to know all the options when your business borrower needs new equipment.

• Is a loan from your bank or credit union the best choice?
• Is it even an option given the borrowers current financial condition?

If not, perhaps a lease is a good option. By understanding leases and having at least three leasing companies to recommend, you will still be at the hub of your business borrower's financial resource wheel.

As always, knowing the lingo is an important part of being, and appearing to be, informed. I found this glossary of lease terms at Alliance Commercial Capital, an equipment leasing company since 1983. It covers...

• Closed End Lease
  
• Conditional Sale
  
• Fair Market Value
  
• Finance Lease
  
• Full Payout Lease
  
• Lessee
  
• Lessor
  
• Master Lease
  
• Net Lease
  
• Non-cancellable Lease
  
• Operating Lease
  
• Put
  
• Sale and Leaseback
  
• True Lease
  
• Useful Life

And at the end of the list they explain end-of-lease options and payment options.

Here is the list.

What other resources do you recommend to your business borrowers when you can't make the loan...or just because it is a better option for them?