An EduLease for school equipment financing is an Operating Lease. An Operating Lease is an agreement for a fixed period of time where payments are made in return for the use of equipment. The Net Present Value (NPV) calculation of the sum of the payments must be less than 90% of the equipment price when new.
During the repayment period, EduLease retains ownership of the asset so that it never becomes the property of the school. When calculating the rentals on an operating lease, the residual value of the asset is taken into account. This significantly reduces the rental cost to the lessee.
Towards the end of the EduLease contract period you will be asked what you would like to do with the equipment at the end of the lease rental term.
You have two choices: –
- Return the equipment with nothing further to pay.
- Continue to use the equipment for a further period of time and pay additional lease rentals. The new rentals will be negotiated when the end of lease discussion takes place. The new rentals will be at “fair market value”. Extended use can be from a month to a number of additional years.