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How to Request an Equipment Lease
Summary: Learn how to place equipment lease orders.
Leases require high-level reporting and must be processed by Purchasing. Never sign a lease agreement provided to you by a supplier. As soon as you know that you want to lease or lease-purchase equipment, contact your Purchasing Team. They will help you determine what procedures you need to follow to ensure acceptance of the University of California Standard Lease Purchase Agreement.
See also Equipment Lease Definitions
If shopping for a copier, check with the UCSC Copier Program before initiating an order for a copier.
- Use the CruzBuy Equipment Lease form.
- Specify the term of the lease, i.e. beginning and ending dates.
- Specify whether there is a buyout option, and if so, what type of buyout:
- $1 buyout: typically pay a slightly higher interest rate over course of lease, and pay $1 when UC takes title; take title when buyout option is exercised
- Fair market buyout: typically pay a slightly lower interest rate, and then pay assessed value at buyout at end of lease term
- Specify "No Buyout Option".
- Provide value of equipment at inception of lease.
- Provide CAAN code and Custody Code, if known.
- Attach Quotes. Add all specific information to the requisition. See How to Add Internal Notes & Attachments.
- Maintenance agreements need to be on a separate PO, whenever possible. If separate PO is not possible, ask supplier to either bill lease and maintenance separately or invoice with separate line items for the lease portion and the maintenance portion on each invoice.
- Enter a line item for each fiscal year of the lease. Use a dollar amount of $10 for subsequent years of the lease, as a placeholder, to keep the order from being closed. The PO will encumber funds for one year of the lease. Each year a change order must be processed to encumber funds for the upcoming year.
How to Exercise a Purchase Option on Leased Equipment
When a purchase option is exercised on leased equipment, a CruzBuy Change Order will need to be completed and approved to add another commodity line to include the cost of the purchase option using either account code 007010 or 007020. Buyout options apply only to leased equipment.
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Last revised: September 30, 2009 (am)