Associated Capital envisions a finance marketplace that is 100% free from misrepresentation and underhanded business practices. AC practices full disclosure and challenges all companies to embrace openness and integrity as the new foundation of business.

Healthcare Professionals are wise to become aware of the 5 common devices listed below. These tools of the trade are generally buried within a finance contract; they result in lost revenues and increased bank profit. In finance, knowing the terms and avoiding the below is as important as knowing the payment itself. Associated Capital empowers our clients with knowledge of how to navigate and avoid these and other similar devices. See detailed explanations of interim rent, evergreen extension, and prepayment penalties below.

• Interim Rent: This is a clause that enables an extra payment at the start of a contract. The client is billed a partial payment for the remaining days in the 1st calendar month. The client is also billed an additional full payment at the end of the term; a 60 month term becomes 61 payments. The interim payment is pure loss.
• Automatic Extension: The Evergreen Clause causes the automatic renewal of a contract at term end. The contract may renew for up to 1 year of additional payments. The client will be required to send a written notification to the lender by a certain date before term end. If the client forgets to send the notification, months of extra, non-refundable­ payments are often charged. A necessary element of most finance contracts due to banking regulations, its negative impact can be averted by a stated purchase option residual.
• Prepayment Penalties: Prepayment penalties result in extra bank profit and are often disguised on a payoff quote. At maximum, the payoff should be the total remaining outstanding payments, plus the residual, plus tax. Associated Capital discounts most early buyouts after 1 year.
• Forced Insurance: Equipment generally needs to be insured. Companies may collect extra fees by billing for duplicate insurance that is unnecessary. Your policy carries the equipment, and the lender bills you for insurance coverage as well.
• Automatic Lien Filings: Many lenders require a 1st or 2nd lien position on the business. We regularly discover liens about which the business owners are unaware. Even though the client must sign paperwork that forms a lien, language may be disguised such that the client not fully understand what is being signed.
  

Details:
Interim Rent
Evergreen Clauses
Prepayment Penalties