Are Equipment Leases Strangling Your Business?


Are You Making Payments on Equipment no longer in use?

 

For the Medical Profession, as for many other businesses, equipment leasing is one of the largest expenses that reduce the profitibility of the business. Additionally, leases are often a point of contention by restricting growth and limiting profits, and preventing updating of equipment.  Doctors attempt to renegotiate leases, but are met with resistance from the leasing companies, if not with outright disdain.

 

Equipment leasing is an unregulated business.  Statutes that apply for consumer lending do not exist to protect the doctor.  Leasing companies hide costs, fees, interest rates and other vital factors affecting alease from the doctor, driving the costs of the lease "sky-high".

 

"True" equipment leases are non-cancelable leases.  Once in the lease, the doctor is required to make all payments for the term of the lease.  To attempt to pay off the lease early, the doctor is required to pay the full amount of lease payments due to the end of the term.  There is no early payment reduction. Lessors will not work with the doctor to reduce costs.

 

LFI Analytics was recently approached by doctors who are struggling with leasing issues.  It was requested that LFI Analytics review their documents to determine the real "terms" of the lease, the "hidden costs", and under what circumstances a lease could be re-negotiated.

 

Analysis of the lease documents revealed the "hidden side" of leasing, from hidden fees, unreasonable broker fees, misrepresentation and other issues.  Analysis also revealed that many leases to doctors may in fact be "disguised loans", which result in the lease being declared a "secured loan" with all the benefits of a loan, including early payoff.

 

After analysis of the documents, LFI Analytics contacted attorneys that we deal with daily, going over what we had found.  It was determined that in many cases, a client could have options available that would lead to restructuring of the agreement, or to litigation claims that would be of extreme benefit to doctors.

 

To assist doctors in evaluating their leases, LFI Analytics has developed a "Free Exploratory Lease Exam".  The exam is designed to determine if causes of action exist that could result in restructuring of the terms of the lease, and that the benefit to the doctors would be cost effective .  Some items the Exploratory Exam will identify:

 

  • Interest Rate
  • Hidden Costs and Fees
  • Whether the lease is a "True Lease" or is a "Disguised Loan"

 

Once the "Free Exam" is completed, the results are reviewed with the doctor. If the results warrant further consideration, the doctor will be offered the names of different attorneys so as to seek a free consultation of possible options available to the doctor.

 

If the attorney and the doctor are in agreement on a possible course of action, LFI Analytics will then do the fee based "Comprehensive Lease Exam", which details in depth the terms of the lease, and other relevant issues pertinent for negotiation or litigation.

 

To receive your "Free Exploratory Lease Exam" call or email for details.

 

925-522-0371

 

Patrick@LFI-Analytics.com

 

Exam Results

Case #1.  $24,000 equipment purchase. 

 

     a.  Found that another $20,000 plus in additional fees charged in the lease and that were not disclosed. 

 

     b.  $18,000 in additional interest paid on the $20,000 fees.

 

     c.  Total additional paid - $38,000.

 

 

Case #2.  $62,000 equipment purchase.

 

     a.  $65,000 in additional fees not disclosed.

 

     b.  $56,000 in additional interest paid.

 

     c.  Total additional paid - $121,000

 

 

Case #3.  $50,000 equipment purchase. 

 

     a.  Operating Capital provided in the lease.  Financed at 13.00%

 

     b.  Lease was found to be a "Disguised Loan" and not a lease.

 

     c.  No longer subject to "lease terms".   

 

All cases referred to an attorney for litigation.