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What to watch out for on a business loan?

Posted On: February 23, 2017 author Paul Kendall

AVOID INTERIM RENT ON A BUSINESS LOAN AND EQUIPMENT LEASE

Interim rent is a hidden fee charged by lenders.

Let’s say a piece of equipment is to be delivered on the 5th of March. The lease/finance contract defines the "delivery date" the "acceptance date" and the "commencement date". All of which is very confusing. The contract states the lease payment will be due on the date specified by the Lessor in the month following the commencement day. So the finance company bills for the "interim period" which is from March 5 to March 30, a total of 25 days.

On the surface, this sounds great, you only have to pay for a partial month. However, the lease doesn't actually start until April 1st. At the end of the lease term they bill you again for the month of March. They get almost a full extra payment, just for asking. All of this is perfectly legal as it is "stated" in your contract.

Always ask your lender if they charge interim rent.

More Resources

Brewery Financing

Restaurant Equipment Leases

Heavy Equipment Loan


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