Ahhhh, copier leases. Love it or hate it, your organization’s copier lease is essential to its success. Multi-function commercial copiers are the all-in-one wizard of the office, magically printing, scanning, copying and faxing pretty much any document you ask it to work its magic on. But even your copier lease might not turn out the way you had hoped.
What if you experience some changes in your relationship with your copier vendor? When the paper gets in a jam (figuratively speaking), whom do you call? Not Ghostbusters…hold off on that phone call for now. Put down the phone and read this article first before you make any rash decisions about your copier lease. By reading this article, you will learn from a company (ClearView) that has worked with countless leases for more than five years.
In this article, we will first explain to you when to review your copier lease. By “review,” we mean taking a second look at the lease’s details and maybe even looking at other leases. We will then show you how hard (or easy) it is to change to a new lease. We will wrap up the article by sharing some copier lease hacks.
What are good reasons that companies should review their copier lease?
If, hypothetically, your organization is fed up with its current situation, then what should it (and you) do? Well, to be fair to your copier/printer vendor, consider that some reasons to review your copier lease may be better than others. Better reasons first:
- Payment increase
If your technology partner springs an unexpected or uncalled-for payment increase, this would be a cause for re-evaluation.
- Deficient service
If the copier vendor is failing to provide the levels of service and support that you need, then it’s time to take a second look at your vendor.
- Deficient equipment
If the equipment is unreliable, or if there are new features that could boost your organization’s efficiency, then maybe you should take a second look at your current equipment.
- New employee
If whoever used to handle an organization’s copier lease was promoted, and a new employee has been given the task of administering the copiers and printers, they should review the lease at that time as well.
What are some worse reasons that companies should review their copier lease?
Now that you know some good times to review your copier lease, you should know about the times when you really shouldn’t review it. Don’t be too quick to tear up that lease.
Although we here at ClearView may like to think that the copier lease is the highest priority for your organization, realistically we realize that that is not always the case. If your organization has more pressing budgetary or organizational needs, then it might not be the right time to review its copier lease. Timing is important.
Along with timing, there’s the issue of having enough time to give the appropriate time and consideration to your copier lease. Since it is so important, you want to be sure that you’re not casually giving off the cuff consideration to your lease. A lot of times, if an organization doesn’t have enough time to really focus on its copier lease, it may overlook some key details in the lease.
How hard is it to change vendors?
The language in the lease, and the agreement between the lessor and the lessee are made and written to be foolproof. Because the leasing company puts up the initial funding for the equipment and loans it on good faith credit, they expect a return on that. However, it might be an option to include a stream of payment to satisfy the remaining obligation.
What’s a personal guarantee in a copier lease?
Ever heard of a “personal guarantee” in a copier lease? Well if it’s in your organization’s lease, then I hope so! So…what is it?
If a company has been in business for two years or less, then leasing companies view it as a higher risk by considering its Dun & Bradstreet (D&B) profile or PAYDEX® score. A PAYDEX score, as defined by D&B, is:
a dollar-weighted indicator intended to reflect a business’s past payment performance. Companies receive a score between 1 and 100, where a higher number represents a greater likelihood that a business will pay its debts on time. This proprietary score is calculated based upon Trade References, which are records of payment experiences submitted to Dun & Bradstreet by suppliers and vendors. These records can include overdue debts and bills that have been sent to collections, or on-time and early payments. Dun & Bradstreet can consider Trade References from up to 875 individual business partners when determining your PAYDEX Score.
Interesting! Why not check your organization’s PAYDEX score, to see how leasing companies and the rest of the business world view your organization? If your organization doesn’t have a PAYDEX score, then sign up for D&B here.
Young companies and companies with a low PAYDEX score can require a personal (or cross-corporate) guarantee in their copier lease. This provides leasing companies with an extra guarantee for lease repayments.
It’s either a personal guarantee or a corporate guarantee, which is really in lieu of a personal guarantee. If someone owns multiple companies or there’s a corporation with multiple entities or sub-businesses, a cross-corporate guarantee is a better way to go, in my opinion, than a personal guarantee.
What can you do about a lease other than buying it out?
If your organization is stuck in a lease agreement that it wants out of, then it may have a couple of options.
A “stream of payments” is an organization’s monthly lease payment multiplied by the term that would be its total stream of payment. Some leasing companies will allow you to return your equipment after having made a stream of payments. That’s a viable option for a company closing a location or changing ownership.
In other cases, companies will have to perform a full buyout, which is the monthly payment multiplied by the term (stream of payments), plus the residual value of the copier.
TIP: In any case, if you’re changing companies and doing a stream of payments, you should review your lease to make sure the new company gave you a complete stream of payments for every item on the lease invoice, including annual property taxes, any insurance charges and any service charges or fees due. Make sure to have a detailed breakdown of what was included.
Before your organization makes a change, take some time to seriously consider how to best go about satisfying your remaining lease obligation. Changes to your all-important copier lease should only be made in the right circumstances with caution. For more copier- and office equipment-related knowledge, click over to the other informational posts on our blog. ClearView is a premier managed print services provider, and our blog provides a wealth of information for those seeking out the most cutting-edge, industry-leading knowledge.