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4 min read

Equipment Leases with Quarterly Payments: Don’t Get Flim-Flammed




Today we’re going to talk about a scam.


I mean it.

Totally bogus shenanigans

Well, on rare occasions…  not 100% bogus…

…but be really careful…

Note: You may read this article or you may listen to it. 

You can find links to download the audio to this article on your phone here. 

You can also listen right here in the webpage:



If you are offered an equipment lease with quarterly payments…


So… there’s some companies out there pushing leasing contracts like this.

Which sounds totally ok.

(That’s why the scam works so well…)

It all comes down this:

“Interim Rent.”

Like most of the scams we see in equipment finance... it all looks legit at first. 

This is super sneaky.


Now… interim rent isn’t in and of itself a scam. 

What interim rent is a little tricky—but here’s an easy way to think about it.

Let’s say you go and you buy a house…

...now... pretend the loan closes on the last week of the month...

...and your payment will be due the first of every month.

The few days between when your loan closes and when your monthly payment is going to be due you have to pay interest. 

The same thing is often true in equipment financing… but we use a word called “interim rent.”

So for example, imagine you finance some equipment and your payment is going to be on the fifth of every month… but the  lease is actually funded on the third.

Most companies will collect two days of rent in this case. So if your payment is $1,000 a month you may end up in the beginning owing them another $60 – no big deal, right?


But… that’s when it’s two days. 

What’s the scam?

The “quarterly payment” model is designed in many cases so that the company gets an extra three months of payments off of you.

No… really.

They’ll design the contracts with 89 (but not 90) days of interim rent.

Oh yeah…


Check this out:

Imagine a 36-month contract to buy equipment…

Now, say you get quotes from three companies to lease or finance a piece of equipment.

The company that offers you quarterly payments will be offering what looks like a much lower rate.

Crazily lower payments than anyone else.


  • They make you pay one payment in advance – but it’s for 3 months
  • Then they punk you with as much interim rent as they can force feed you


Some quarterly payments are legit…


...if the company is heavily pushing them…

...it’s not because they are nice…

So… on that 30 month contract… they’re getting 6 months of extra payments, right?

Then… some will tell you… “this is a 5% rate… go ahead and calculate it..”

It’s such an outrageous scheme…

…when we try to explain it…

Some of our customers look like this…


And.. it’s a 5% rate… as long as you forget you paid a whole quarter upfront and then are about to get sandblasted on another 89 days of bogus payment…

True Story…

We almost lost a deal to a competitor because of this sleazebaggery very recently…

So we had a customer, a strong borrower, good credit, good cash flows. 

There were two negatives to the situation:

  • He had just under two years in business
  • The type of equipment he was buying

It was basically small tools and an oil pump that are used in the oil & gas industry.


Most equipment leasing companies will not extend an offer to anybody in oil & gas…

(It’s a super volatile market and default rates can be high…)

It’s less hard with some of the heavy drilling rigs, for example we often see these workover rigs that last for 40 years and those are great collateral and much easier to get financed. 

But when you’re dealing softer equipment and a cautionary industry it can be hard to get somebody approval and rates can be a little higher. 

But …

We knew who we’re being shopped against…

We also knew that outside of fraudulent offer, the offer that we extended was going to be pretty much the best offer that this gentleman could come by. 

But… we also knew that one company was going to come in with a lower payment than anyone else – because they were going to offer quarterly payments…

… which was going to be a total boondoggle like this guy was literally walking in to being just totally screwed. 

Just like I don’t do on the podcast, we don’t ever badmouth our competitors,

(even when we think it’s the scummiest band of pigs on the planet)


Even when we know that the customer is being defrauded…

….because we don’t want to put ourselves in that situation of libeling or slandering someone else.

So… there is a really, really good resource out there which is called “Leasing News”. 

Leasing News is run by Chris “Kit” Menkin and he and his associates are very helpful in documenting “bad-guy” behavior in the industry.

He chronicles many of the bad tactics, all the stuff to be careful of, but he can do that because he is a journalist. 

I’m not a journalist.

I’m out there competing for business, and so the minute I say to you,

“Oh! that guy is a scum bag..”


Not a good way to represent oneself.

…because I’m not an objective source…

…the most we’ll say is two things…


make sure you read up on the reviews of that company...



(and we won’t tell you, “Hey the reviews of that company are awful…”)

We’ll just say you, read up our reviews and read up the competitor’s reviews on Google and Ripoff Report and so forth.

Second, in this case we said, "let’s just you know make sure that you understand clearly about interim rent."

That was it…

… and he asked the company that we were competing against to spell out clearly in the contract if there would be interim rent and how much interim rent would be added to that contract. 

Which is a very, very fair request.

Magically he came back to us…

… because his wonderful approval was cancelled the second he wanted clarification on interim rent.


Them dudes was getting ready to tool him up. 

.And so…

… anytime a company is trying to push you towards quarterly payments…

….just be really careful…

Here’s an issue of Leasing News that has a great write-up on the topic:

Quarterly Payment Leasing Scam

So…  if someone is offering you a quarterly contract….

And that contract ends up being on a quarterly or monthly basis hundreds or thousands of dollars cheaper than the two or three other people that you got quotes from…

…something probably stinks.

So… get  that leasing company to document interim rent in writing and watch the approvals magically evaporate….

Want an alternative to getting scammed?

Give us a jingle at 866-631-9996 or click below…

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