“We’ve been doing a fair amount of equipment leasing lately, and it occurs to me that I’ve never checked the accuracy of the payment schedules that the leasing company gives us. Is this something I should worry about? And if so, how do I verify that the payments are calculated correctly?”
Mike: I just came across exactly this kind of situation recently: A software company discovered that the payment schedule provided by its leasing company called for a total of 37 monthly payments on a 36-month lease. However, this is the first time I’ve seen (or caught?) such an error in almost 40 years of number-crunching.
Since there are plenty of Web sites that offer free amortization calculators, it’s easy to double-check a simple debt repayment schedule.
Leases are a little more complicated, especially if the leasing company is reluctant to disclose its interest rates and fees. If you can pry those numbers out of the lessor, you can easily duplicate the payment schedule in a spreadsheet and compare the results. Otherwise, if the numbers are secret–well, there’s not much you can do except trust the leasing company.
The ASK MIKE is a weekly column providing answers from finance and small business expert Michael Gonnerman. Mike has served as a trusted advisor to hundreds of technology CEO’s and investors as well as served on more than two dozen corporate boards.
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