Computer Leasing Key Terms

Know what you're getting into with computer leasing key terms

Computer leasing is a popular way to get the computer equipment you need without spending a lot of money upfront. Whether you are the computer lessor or lessee, there are several terms that you should be aware of. Lessees, for example, may want to ensure that they are working with a certified lease professional. It's also a good idea to know what type of lease you have, such as an open-ended lease or a safe harbor lease.

National Association of Equipment Leasing Brokers

The National Association of Equipment Leasing Brokers is an organization dedicated to advancing the careers of equipment lessors. If you are a lessor, you may want to consider joining for networking and educational opportunities.

Certified Lease Professional

A Certified Lease Professional has industry certification showing that they have received specific training on all aspects of leasing. Working with a Certified Lease Professional ensures that you are dealing with someone that is qualified.

Open-end and closed-end lease

Open-ended leases require a large lump-sum payment at the end of the lease, based on the market value of the equipment. It's important for business owners to factor this into their estimates when calculating the cost of leasing a computer if this is the type of lease they get. At the end of a closed-end lease, they simply return the equipment.

Safe harbor lease

A safe harbor lease allows the lessor to claim the tax benefits of ownership of the computers if the lessee cannot use them.
Massachusetts Department of Revenue.

Residual value

The residual value is how much the computer equipment is worth at the end of the lease. You can often decide to purchase the equipment for this price at the end of the term. The estimated residual value often affects the monthly cost of the lease, so it's important to understand how the lessor determines it.

Lease calculator

A lease calculator can help you determine whether it's more financially sound to lease or buy your computer equipment. For companies that require the latest technology, leasing is often a good idea. Others may want to consider purchasing outright.

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