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Questions & Answers

1. How does a customer decide whether to lease or buy a piece of equipment?

2. What are the first steps for a customer interested in leasing, contact Chesapeake or contact a vendor?

3. What if a customer doesn’t know of an equipment vendor that offers the type of equipment needed?

4. What information will a customer have to provide to obtain a lease?

5. What type of lease does my business need?

6. What are the different types of leases?

7. Will I have to provide my personal credit and financial history?

8. Does my business tax or accounting method impact the amount I can lease and the financial information to be provided?

9. What is a sale-lease back?

10. How long will my lease decision take?

11. What should I do if my loan is rejected?

12. What should I expect if my lease is approved?

1. How does a customer decide whether to lease or buy a piece of equipment?

In most cases leases do not require a down payment but may require the first and last monthly payment at settlement.
Equipment is paid for as it produces a profit.
Lease rates may be higher but the monthly payment is shown as an expense and there is an option to purchase the asset at the end of the term.
Operating leases do not appear on your balance sheet.
A Capital Lease must be shown on your balance sheet and are depreciated. Capital leases can have a $1 purchase option.

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2. What are the first steps for a customer interested in leasing, contact Chesapeake or contact a vendor?

Generally customers should identify the equipment to be leased and determine the best vendor to provide the equipment necessary to meet their business needs. Initially, all Chesapeake requires from a customer is a completed application and the vendor name and our experienced sales staff will manage the transaction quickly and effectively.

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3. What if a customer doesn’t know of an equipment vendor that offers the type of equipment needed?

The CILC sales staff has multiple vendor contacts in a variety of business industries and they are available to direct a Chesapeake customer to a vendor or multiple vendors that may offer the equipment their business needs.

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4. What information will a customer have to provide to obtain a lease?

Lease financing approval is similar to a traditional bank credit approval. Along with a completed application Chesapeake may require some additional financial information depending on the amount or complexity of the lease financing transaction. Chesapeake‘s sales and credit staff will work directly with lease customers to determine the level of financial information needed to obtain a quick credit decision.

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5. What type of lease does my business need?

Let our experienced sales staff be your guide. The Chesapeake sales team can direct you to the lease type that will fit your business needs.

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6. What are the different types of leases?

Operating Lease: A true lease for book accounting purposes. An operating lease is accounted for by the lessee without showing it on the balance sheet. The lease payments are accounted for as an operating expense.
Finance Lease or Capital Lease: A capital lease is accounted for as a traditional loan and depreciated on the company books.
$1.00 buy out lease: A type of finance lease that allows the equipment to be purchased at a set amount at the end of the lease.
Purchase option lease: A lease that allows the lessee to purchase the equipment at a set amount at the end of the lease.
Fair Market Value Lease: A lease with a predetermined value limit set at the time the lease originated.

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7. Will I have to provide my personal credit and financial history?

Possibly! If your business is a sole proprietor or a closely held business a personal financial history may be required. The lease application will be the guide and the Chesapeake credit department will notify you if additional information is needed.

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8. Does my business tax or accounting method impact the amount I can lease and the financial information to be provided?

The business cash flow is the main consideration in your lease transaction. You should contact your accountant or tax advisor regarding the benefits provided by leasing. Chesapeake offers a variety of lease types, multiple equipment types and we will make every effort to make your financing work at terms that can benefit your business.

Normally the financial information needed to evaluate your lease transaction is the Balance Sheet and Income Statement (Profit & Loss Statement). Business tax returns provide the same level of information. The Chesapeake sales and credit staff will work with you to determine the type and level of financial information necessary to evaluate the request.

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9. What is a sale-lease back?

The equipment the business currently owns or has purchased is sold to CILC and then leased back to the business for use.

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10. How long will my lease decision take?

Upon completion of the application package the lease decision should be available in 48 hours or less. The Chesapeake goal is an approval in 24 hours or less.

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11. What should I do if my loan is rejected?

Chesapeake will make every effort to find adequate financing for your lease however you will be notified when all financing alternatives are exhausted.

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12. What should I expect if my lease is approved?

We will notify you of the approval and contact the equipment vendor. We will send or deliver the lease documents to you at your direction. Upon execution of the documents Chesapeake will pay the vendor and maintain contact with the customer to insure satisfaction.

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