What is an equipment lease?
The most common complaints received by CAP from business consumers involve credit card equipment leases.
The leases are generally financed by third parties. An “independent” salesperson works to sell you, the business consumer, a lease. Typically, credit card machines cost less than $500. Yet, in the typical credit card equipment lease, however, you end up paying thousands of dollars—pure profit for the salesperson and finance companies.
Can I cancel my lease?
The typical lease’s term is 4 years, and is expressly not cancellable. Nonetheless, under Vermont’s Home Solicitation Sales Law, you usually have a legal right to cancel a sale made either in person or by phone within three days of the sale provided certain requirements are met. The seller must provide you with notice of this three-day right to cancel. If you did not receive such notice, then you may cancel your lease at any time until that notice is provided.
Is it ok to sign a personal guaranty with an equipment lease?
The standard lease includes a personal guaranty. This means that even if your business closes, you personally are on the hook to continue paying the lease — even if you can’t use the credit card machine.
Does the salesperson who sold me this lease work for the company financing my lease?
Financing companies recruit salespeople with promises of a lucrative career selling equipment leases. However, financing companies try to limit their responsibility by treating their salespeople as independent contractors. It is important to remember that while you may be signing up with a person who has made you promises, your lease is with the financing company. Promises made by the salesperson must be reflected in the written lease. Otherwise, the financing company may refuse to honor a salesperson’s promises.
Where should I research a lease?
Your local Chamber of Commerce may have references for responsible local suppliers. You can also call us at CAP (800-649-2424) to see if we have recent complaints of a supplier you are considering.