Having spent a number of yearsboth in the equipment-leasing industry and as a corporatetreasurer, I am still surprised by how often companies appear tojust enter into lease transactions with no more foresight than thestroke of a pen. In many cases, they enter a deal worth hundreds ofthousands, or even millions, of dollars over multiple years aftervery little review or analysis of the lease transaction's terms andtrue costs over time.

Most of the corporate lease-procurement effort revolves aroundnegotiation of the equipment's purchase price at the beginning ofthe lease. When that is completed, the supplier's captive leaserepresentative steps in with a lease contract, which the buyerimmediately accepts without any meaningful review or pushback.

Such an approach may leave a considerable amount of money on thetable. Quite often, lessees negotiate a good cash purchaseprice, only to relinquish much of those savings in the leasefinancing. The lessee's finance staff don't do an adequate analysisbecause they don't have the time or expertise, which enables thevendor to recapture margin it forfeited in price negotiations.