It can be catastrophic to lose equipment that is needed to generate business income. Unfortunately, when sales are down and costs have already been cut to the bone, it still may be impossible to keep current with essential equipment lease payments. That’s when the real trouble starts.
Once the leasing company, or lessor, starts to send threatening letters or enlists the help of a law firm, you have to act quickly and effectively.
Assuming that you have realistic plans to get back on track with revenues, you must to be able to communicate to the lessor that you need its help and consideration. It helps to provide information on:
- what precisely caused this problem, together with
- the current status, and
- outline of your strategy for a turnaround.
The lessor wants to keep you as a paying customer. Its willingness to restructure payments or to give you a break in the total sum owed will be influenced by the percentage of monthly payments made to date and the equipment’s estimated garage-sale value. It does not want to lose out, big time, if your firm goes under.
A key to resolving lease issues is to recognize the lessor’s potential loss. It is generally understood that businesses operate in an imperfect, risk-laden world. A lease is not an annuity. It is your job to bring out the necessary facts and propose a realistic, practical solution.
Your proposal has to be aimed at the lessor’s best interests, emphasizing the upside of doing wihat you suggest and the downside if not. Given that the lessor has lost a certain degree of faith in your ability to make monthly payments – restructured or not – you have to give it some confidence in your ability to follow through on a payment schedule that your firm can sustain.
Equipment lease disputes can appear to have no solution to troubled business owners and managers at the receiving end of hostile telephone calls and correspondence.
These issues can be compounded by replevin law suits, the intent being to have the sheriff turn up with a court order to seize the equipment. This could traumatize you and your employees and suck the life blood out of your business.
The essential thing is to act quickly and decisively, before the problem gets worse. Don’t make false promises that will prove impossible to meet. Get professional help to deal with the issue.
Your time is better spent in developing new ways to generate business income than in the uncharted territories of dealing with a lease dispute that may be critical to your business survival.