Leasing equipment: The paperwork

Stephen Galop of UniCapital Business Credit Group in Miami points out that the administrative leasing process has come a long way in recent years. "Lease contracts used to look like a best seller -- pages and pages on end." But the contract has been simplified considerably, and now there are just a few basic forms.

Common leasing documents include:

• A lease document, which is generally one two-sided page
• Invoices from all vendors
• A Uniform Commercial Code, or UCC, form in which the lessor is authorized as the owner of the equipment
• A Delivery and Acceptance Receipt, in which the small business owner signs off, saying that all equipment has been received and meets specifications
• Company Owner documentation, which is typically used only with very small ticket leases to prove the lessee owns the company
• A check for the first and last month's rent. Independent leasing companies do not generally mandate deposits, but they can help enhance a business owner's credibility

Galop urges small business owners to ask several questions before signing a lease agreement. "For one, find out if the end of the lease calls for a fixed purchase option or a fair market option, where you may either negotiate the current value of the equipment or choose not to purchase it at all," he says.

Ask about renewal terms and whether there is an option of a month-to-month lease if the equipment is needed -- or arrangements have not been completed to replace it -- at the end of the lease.

"Also, ask about any undisclosed fees, such as broker fees or commissions, property taxes, sales taxes, maintenance or insurance fees," Galop says.