Leasing Equiment: Impact on Credit

[yeiser]

I am interested in leasing some office equipment from Apple for my business. I was wondering exactly how does leasing impact the business owner's credit. As far as my credit report is concerned, how different is leasing compared to simply getting a loan? Does the lease appear as a loan on the credit report? Does it lower the credit score? Please comment.

[vangogh]

I would think any impact to the business' credit would depend on how well you do or don't continue to pay the lease. I wouldn't think leasing in general would affect your credit one way or the other. I don't think a lease would be thought of as a loan in any way either.

If you fail to make lease payments and your equipment is taken away then I'm sure your credit score goes down. If you continue to make your lease payments on time, I would think it improves your credit score.

But I wouldn't think leasing office equipment on it's own has any effect on your credit. It would be more about whether or not you make the lease payments.

[nealrm]

I'm not sure how the Flease will effect your credit score, but it is not really a good option. With the number of business closing down, used office equipment is very cheap. Why burden yourself with either a loan or a Flease, buy it outright.

[phanio]

It will be treated just like a loan on your personal credit history - if you pay as agreed than it should help your credit - if you don't than it will hurt.

Leases can be good - keeping payments down as well as (if in the contract) shifting maintenance over to the lessor. But, you might not be able to get the tax credits for depreication if that matters to you.

Also, see if there is a purchase agreement at the end of the lease - might be able to buy the equipment should you still want it in the end.

The other poster here makes good sense - if you can find similar equipment at fire sale prices. Most people lease because they don't either have the cash on hand to purchase (or have limited cash flow that is needed in the business) or can't get debt financing.