Could you're equipment leasing agreements hold the key to big commissions?

Local businesses need the right tools to do business...whether they are photocopiers, printing presses; telephone equipment ....the list is endless really! ........ Fact is, we all need some tools.

The question is and it’s the same for new and current businesses ....” As a business how can we get hold of the tools?”

The answer is you buy them of course...

Now, not all local businesses can afford to purchase the equipment outright, nor should they - even if they really could, because of the strain such outright purchases may have on cash flow.

The way round it is, to lease the equipment which involves taking out a finance leasing agreement subject to status over a fixed period of time.

Businesses have done this for years and years as it helps them to be able to trade without all the horrendous initial equipment costs involved.

Until only recently such leasing agreements were set in stone, and what the agreement says is what you paid on the assumption that the equipment was being purchased of a suitable retail value.

Now there are rumblings - that such equipment leasing agreements may have or still hold increased contingencies for the supplying companies such as hidden commissions, and exorbitant increased retail rates on the equipment.

As a small business, you owe it to yourself, your company and your staff to ensure that whatever equipment leasing agreement(s) you have is fit for the purpose and that it is commensurate to the overall price you’re paying encompassing the retail value of the equipment.

Some examples of equipment leases that we’ve come across which are incorrect are:

A printing company had a 7-year finance lease agreement on a Heidelberg Speedmaster printing press – upon checking the small print and undertaking some complex calculations within the lease agreement. It was established that an overcharge was going to be in excess of 80k, this consisted of commissions effectively being hidden within the lease agreement as well as an unfair overcharge on the retail rate of the equipment.

A West Midlands school had a photocopier on a 3-year lease which after 12 months the supplying company advised the school that they were upgrading their photocopier. The new equipment they supplied was no different to the one which they took out, however in doing so this effective started the 3-year lease agreement again – effectively tying in the school in on a 4-year agreement for the very same photocopier.

There is no suggestion that such practices are a result of any collusion between manufacturers, suppliers and finance companies, however, upon checking more and more equipment leasing agreements it is being identified as more commonplace that possible overcharges are being made within such agreements.

Those local business people who try to understand and get their heads around the new facility of checking leasing agreements for overcharges, hidden commissions...and so on - will no doubt make comparisons to the overcharges made within the PPI industry and the trail cases heard and subsequent recommendations and rulings made by the UK legal system.

Local businesses having the ability to connect to companies who provide a service in checking leasing agreements will become a growing industry over the next 12 months or so – but beware that there are already one or two companies out there who make false promises or provide miss-leading hope of a positive result.

As a local business, do you have any current equipment leasing agreements in place? Or.... have you ever had any such agreements which have now come to an end?

If so you may wish to look into them, although you may have had an equipment leasing agreement it may now be past its term – worry not, as so long as you have all the paperwork, and a check on whether an overcharge has taken place, as this can go as far back as 10 years.