Sale and leaseback of equipment is a financial option available to businesses that is something…
The fact that the interest rate is fixed is a significant advantage for equipment financing as it protects the borrower against a potential rise in interest rates and provides certainty of future repayments. However, if you want to pay off the loan early, you will incur break costs!
This cost can be significant, especially if you still have a long contract term remaining.
What are Break Costs?
Why Do Lenders Charge Break Fees?
How Lenders Determine Break Costs
The result will be the break cost you need to repay.
How to Avoid Break Costs.
While Break Costs are sometimes unavoidable, in my experience, when it comes to Equipment Finance, ensuring you have the right finance structure and term from the outset is the best way to avoid financial pain down the track.
If you would like to learn more, or are thinking about equipment finance, don’t hesitate to get in touch.