Why tool Lease Rates growth When Interest Rates Are Low

Do you know about - Why tool Lease Rates growth When Interest Rates Are Low

Some leasing clubs are addition their lease rates for the first time in many years. Does this mean interest rates must be addition if lease rates are going up? No.

What I said. It isn't outcome that the real about Interest Rates Today. You check out this article for info on an individual need to know is Interest Rates Today.

How is Why tool Lease Rates growth When Interest Rates Are Low

We had a good read. For the benefit of yourself. Be sure to read to the end. I want you to get good knowledge from Interest Rates Today.

Since the year 2000, long-term interest rates have dropped dramatically. In 2000 the three-year Treasury Constant Maturity was 6.22%. In October 2009 that same rate was 1.46%, a drop of 476 basis points.

Lease rates are set by leasing clubs based on a whole of factors. Many of today's increases are due to the whole lending and economic health of our country. Leasing is not exempt.

If the cost of money is down, why are lease rates increasing?

When you do a lease vs. Buy analysis, it's prominent to understand the components that go into a lease rate factor.

Here are 10 components of your lease rate.

1. Cost of Funds: At what interest rate does the leasing firm borrow its funds? If the bank is in trouble, it may have a high borrowing rate.

2. Lease Term: How long is the lease length? Most leases range from 24-60 months. The longer the lease term, the higher the leasing company's borrowing rate. Leasing clubs pass their higher borrowing costs to you in higher lease rates.

3. Residual: How much residual risk is the leasing firm willing to take on the equipment? Technology equipment such as desktop and laptop computers, servers and storehouse equipment sustain 3% to 12%. The higher the residual, the lower the lease rate and your payment.

4. Resale Market: What is the health of the used equipment resale market? With businesses failing at report rates, the used equipment market is flooded with repossessed and off-lease equipment. The more used equipment available, the lower the residual and the higher your payments.

5. equipment useful Life: If you are leasing long-term manufacturing equipment, your leasing firm must understand long-lived assets. If it does not, it will offer you a shorter lease term and higher payments.

6. Deal Size: How much do you plan to borrow? Traditionally the more money you need, the lower the borrowing rate. The lease rate per ,000 is higher to lease 0,000 than ,000,000 of equipment.

7. Depreciation: Will the leasing firm depreciate the equipment? If not, you will pay a higher lease rate than with a leasing firm that can utilize the depreciation.

8. Reputation Strength: How financially strong is your company? The leasing Reputation market is in rough shape now. The equipment Leasing and Finance Association's (Elfa) monthly Leasing and Finance Index released December 23, 2009 reported that lease application volume for new lease firm was down 7% compared to the same duration in 2008. Leases over 30 days delinquent are up 15% and one in every three lease applications is declined. Read Elfa's full press publish at http://elfaonline.org.

9. Industry Expertise: If the leasing firm does not understand your industry, trends and issues as well as the equipment, your application is more likely to be declined.

10. Maker sustain and Guarantees: Is the Maker guaranteeing the lease? If your firm is financially weak, this is good. This certify often will gain you a lower lease payment.

And you belief it was only about interest rates!

More data plus resources and interactive tools to help you analyze equipment leases are available at http://shop.leasespeak.com.

I hope you receive new knowledge about Interest Rates Today. Where you may put to use in your life. And most significantly, your reaction is good Interest Rates Today|Interest Rates Today|"Interest Rates Today"|his explanation Interest Rates Today}.Read more.. his explanation Why tool Lease Rates growth When Interest Rates Are Low. View Related articles related to Interest Rates Today. I Roll below. I even have counseled my friends to help share the Facebook Twitter Like Tweet. Can you share Why tool Lease Rates growth When Interest Rates Are Low.

---