Interim rent is a fee that funding sources charge lessees to cover the time lapsed between when the funding source pays the vendor of the equipment and when the first payment is due. This is calculated by dividing the monthly lease payment (including tax if necessary) by the number of days in the month. For example, a lessee signs a lease, received equipment and signs the delivery and acceptance to start the lease on the 15th of the month with a funding source. The funding source pays the vendor on the sixteenth – 15 days before the lessee’s first payment is due. The lessee’s first billing statement will show the first payment, plus 15 days of interim rent to cover the period between the date the funding source paid the vendor and the lessee’s first payment due date. Interim rent does not go towards the balance of the lease. Each funding source handles this differently. Some funding source do not charge interim rents, while others do.

A lease is a contract between a lessor and lessee which gives the lessee the right to use the leased equipment for an agreed period of time (typically 2-5 years, or 24 to 60 months).

A lease rate factor is a percentage which when multiplied by the equipment cost provides a periodic rental payment.

The lease term is the fixed number of payments on a lease agreement.

A lessee is the user and guarantor of leased equipment per a lease agreement.

A lessor is the owner of the leased property being used by the lessee.

An LLC is not a corporation, but it offers many of the same advantages. Many small business owners and entrepreneurs prefer LLC’s because they combine the limited liability protection of a corporation with the “pass through” taxation of a sole proprietorship or partnership. LLC’s allow greater flexibility in management and business organization over corporations.