Equipment Leasing
There are many companies in existence who are in the business of providing equipment, ranging from door entry systems, computerised tills, CCTV cameras, screens, projectors and air conditioning system to clubs on lease arrangements.
The information supplied by these companies often looks attractive and the sales personnel employed are mostly smart and personable. However, the fact is that most offers, whilst at a glance might appear good value, ultimately involve complex leasing contracts which run for many years and sometimes incorporate automatic renewable terms in the event of cancellation notices not being provided by clubs within a specified time period.
Leasing works on a hire purchase system and equipment will never ultimately belong to the club. In almost every case, companies selling the equipment use a separate finance company which actually owns the equipment and it is this finance company which a club will deal with if there are problem with either the equipment or the lease.
Therefore, when problems occur, the companies which sell the equipment to clubs no longer wish to be involved and clubs are left to defend themselves against finance companies which are always quick to threaten legal action in an aggressive manner, introducing additional financial penalties which add further financial costs and often anxiety to club officers.
Some clubs have ended up paying in the region of £23,000 for a simple camera or door entry system and, in one case we have encountered, a club had five separate leasing obligations totalling £80,000 on equipment which was of little use or was no longer being used. In each case, the leasing contracts were legally binding and left no escape route for the clubs concerned.
We strongly advise clubs not to enter into leasing arrangements for such equipment, however plausible the offers may appear to be. We frequently find that the sales personnel will get the Secretary and Chairman to sign the agreement before it has been presented to the committee. Glossy brochures and smart-talking salesmen cannot hide the fact that clubs would be better off buying the advertised equipment outright (with perhaps an additional simple maintenance agreement), or borrowing the money from a bank to purchase the equipment outright.
All clubs with such agreements in place should re-examine the contracts they have entered into and make careful notes as to when cancellation notices should be made. All proposed new contacts must be presented to the full committee and the club should prevent any single Officer or member of the committee signing lease and hire purchase agreements. Finally, avoid agreeing to offers of upgrading lease equipment already in place as these invariably create new contract terms.