When choosing an independent lessor, like Pacific Rim Capital, Inc., for your Material Handling Equipment (MHE) needs, it is important to understand the leasing process.
The Life Cycle of Your Deal:
1. Select Vendors and Equipment
- Lessees have full control of choosing their vendor, manufacturer, equipment specifications, and negotiation of unit price.
- Once a Lessee agrees to the unit price with a manufacturer, PRC can begin to price the transaction.
- When the Lessee awards its first transaction with PRC, PRC and the Lessee must first negotiate a Master Lease Agreement (“MLA”) with PRC. The MLA lays out the terms and conditions for the relationship between the Lessee and Lessor.
2. Negotiate an Equipment Lease Schedule
- While the MLA will include general terms and conditions that govern the relationship, the Equipment Lease Schedule (ELS) includes terms that pertain to a specific transaction or equipment type.
3. PRC to Issue Purchase Order to Equipment Manufacturer
- Once the Lessee executes and returns the ELS to PRC, PRC would then be authorized to issue a Purchase Order (“PO”) to the equipment manufacturer. The vendor will then manufacture and deliver the equipment to the Lessee’s facility.
4. Equipment Delivery and Documentation
- When a vendor is ready to deliver the equipment, they will provide an invoice to the Lessor.
- Invoices provide specific details about units, such as price, delivery date, location, etc.
- This information will be provided on lease documentation – to ensure that the units we have been invoiced for are, in fact, the units that the Lessee received.
5. Lease Commencement
- Once all equipment has been delivered and invoices have been received, the lease is then ready to commence.
- To commence a lease, the Lessee must sign an Acceptance Certificate (“AC”), which states that the Lessee has inspected the equipment, the equipment matches what has been ordered, and the equipment is operational.
6. Management of Assets
PRC provides additional personalized, hands-on support throughout the life of the lease by:
- Providing account and administrative assistance when you need it.
- Tracking your assets throughout the course of the lease ensuring that come lease end, you have maximized your ROI and your equipment has gotten the most of its useful life.
- Giving our Lessees direct access to our STREAM Customer Advantage Portal®
7. End of Lease
When the lease is coming to maturity, the customer has a few options. They can:
- Return the equipment
- Purchase the equipment
- Renew the lease terms
- Do nothing (this then becomes a month to month rent schedule.)
- PRC is here to coach you through your end of lease options and make an educated decision based on the previous lease terms and begin a new deal life cycle.
The life cycle of each deal moves through the same stages regardless of the company you choose to finance your Material Handling Equipment (MHE). However, the company you choose to work with for your leasing needs plays a large role in seeing who will deliver the lowest total cost and maximize the return on investment of every asset.
By taking the time to research and choose a company like Pacific Rim Capital, Inc. to manage your financed MHE, you will be able to get customized solutions, competitive pricing, and fleet optimization services among many other cost savings benefits. In addition, you will also have access to knowledge and expertise to help you be prepared to make your experience seamless.