Terms can be mesmerizing, but companies get a rude awakening when leasing's real cost is revealed.
Linda Corman, CFO Magazine
July 1, 2006
While the article, “(Don’t) Look Deep into My Lease,” acknowledges that neither side “holds all the cards,” what it fails to stress is that leasing works best when it is a two-way street – where the lessor and the lessee strive for a balanced and mutually beneficial relationship. As with any successful business transaction, the lessee and lessor both need to focus on achieving a fair and balanced agreement.
For a lessee, that means doing more than just shopping for the lowest price. Industry experience suggests that operating requirements frequently change during a lease term, and common business sense dictates that a low lease rate often leads to onerous terms and conditions, restricted flexibility and increased costs during and at the end of the lease term.
Lessors, on the other hand, must provide their customers with the information they need to make an informed decision about which lease structure suits them best, and be forthright in situations where leasing is not the optimal financial solution.
Candid discussions regarding when and how to lease most effectively are crucial. Yet, by focusing on the adversarial nature of some lessor/lessee relationships, this article makes leasing seem fraught with pitfalls, when in fact, many businesses, both large and small, enter into positive, transparent lease arrangements every day. When both sides fully engage in the process, lessors and lessees strike a balance that results in both sides receiving the benefits they desire and expect.
Senior Vice President of Financial Services
Forsythe Solutions Group, Inc.
Posted by Kyra Auslander | October 27, 2006 04:31 pm© CFO Publishing Corporation 2009. All rights reserved.