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How to start a Lease Company – Sample Business Plan Template

Do you want to start an equipment leasing company from scratch? Or you need a sample leasing business plan template? If YES, then i advice you read on. To lease means to give out a property, an item or services for an agreed period of time in exchange for payment. In other cases, the lease is just works like a rent; no term of ownership is made in the lease agreement, just a renewal clause.

A lease company purchases items and lease out to people for a specified period of time for payment of a fixed amount. A lease company is a lucrative business to venture into, because it has the potential of bring the owner a high Return on Investment.

For instance, let’s say you invest $100,000 to build a 6 apartment complex, which you lease out for a monthly fee of $600 for each apartment to 10 people; it means that in less than 15 years, you should be able to recover your initial investment and start making profits.

Any item can be placed on lease, as long as both parties understand and adhere to the terms and conditions of the lease agreement; and failure to meet up with the lease agreement can lead to the termination of the lease contract. Lets take it a little further by discussing what you need to start a lease company and how to go about setting up your own lease company.

What You Need to Start a Leasing Company

  • Capital

This is the number one thing you need to run a lease company; you need capital to purchase the items you lease out. If you are starting out the company on a big scale, you may need to buy the items in bulk quantity. A bank or an angel investor can help you raise the required capital needed to run a lease company.

  • Professional Lawyer

You will need the services of a professional lawyer to draw up a lease agreement that will cover all aspects of the agreement; and also you help you initiate a legal suit when the other party defaults in fulfillment of his or her terms of lease contract.

Starting a Lease Company – Sample Business Plan Template

1. Decide on the Item to Lease

The first step is to decide the items that your company will lease; most lease companies focus more on properties and vehicle. You can create a niche for yourself to lease other tangible items like heavy duty machineries and equipments.

Leasing out electronics and other gadgets that depreciate in value with continuous use may not be the best option for your lease company. Also, if all the lease company in your area are focused on a particular item, it will be for the best interest of your company to venture into a different product, to avoid stiff competition.

2. Register Your Business

Registering your lease company will give your business better credibility and enable you operate as a legal entity; get business permit from your State, TIN and EIN. Business liability insurance is also required to take care of bad debts and fraudulent clients.

3. Raise Money to Purchase the Items

After you decide the items your company will lease out, then you have to source for funds to get started. Most times you may require a large capital base depending on the items or cost of what you are leasing out.

Just know that you will be able to recover your investments and make profits with time; I mentioned earlier that banks and angel investors are the best options to source for start up funds if your personal funds cannot get you started.

4. Get a Lawyer

You need a company lawyer that will be on the company’s beck and call; the duty of the lawyer as mentioned will be to draw up a lease agreement, advise to both parties in lease contract on the proper steps to take when there is a default in fulfillment of the terms of the lease by any of the parties.

5. Order for the Items for Lease

The next step is to order for the items that will serves as the basics for the lease agreement. If you are into equipment and machinery lease, then you have to order for brand new equipments; remember that buying in bulk quantities from manufacturers will give you access to some discounts.

If you are into property lease, you can actually contract a building construction company to undertake the building project from scratch or you can purchase a house from real estate agents.

6. Draw up the Lease Agreement

It is the duty of the company’s lawyer to draw up a lease agreement that will cover all terms of the contract. Some basic content of a lease agreement include duration of the lease, due dates for payments and how often the payments will be made; whether weekly, monthly, bi-month should be include in the lease agreement.

Also, condition that can lead to the termination of the lease, what happens when one party defaults in any of the conditions of the lease, amount for initial deposit and the terms for renewal of a new lease agreement. The lawyer should be as specific as possible in the terms of the lease, and ensure that the other party is given enough time to go through the lease agreement with a legal counsel to avoid any future conflict on the grounds of misunderstanding of the terms of lease agreement.

7. Advertise Your Lease Company

The best way to advertise your lease company is to get to people that need the property or item your company is leasing out. For instance, if you are into property lease, you can notify realtor in your locality of your lease deal; if you are into lease of machineries and vehicles for construction; you send proposals to construction companies in our area; same with any other product you intend to lease.

Finally, you may not see the returns on your investments as soon as you start your lease company; but with time, you are sure of recovering your investments and also profit from the business in long term.