You are selling your business and the buyer wants to keep the copier. The lease has 30 months remaining at $375/month. Both sides want a clean transfer. But the leasing company will not just swap names on the contract because you asked nicely.
Here is the exact process to transfer a copier lease to a business buyer, what it costs, and where deals get stuck.
Step 1: Confirm the Lease Allows Assignment
Open your lease agreement and look for the “Assignment” or “Transfer” clause. Most commercial copier leases allow the lessee to assign the lease to a new party with the leasing company’s prior written consent. Some leases restrict assignment entirely, but this is rare.
The key phrase to look for: “Lessee may not assign this lease without the prior written consent of Lessor, which consent shall not be unreasonably withheld.” That last part is important. It means the leasing company must have a legitimate business reason to deny the transfer.
Step 2: Get the Buyer’s Credit Approved
The leasing company will run a credit check on the buyer, just as they did when you originally signed the lease. The buyer needs to meet the same creditworthiness standards. If the buyer is a startup or has limited business credit history, this step can be a barrier.
To speed up the process, have the buyer provide two years of business tax returns, recent bank statements, a business credit report, and personal financial information from the business owner (if a personal guarantee is required).
Step 3: Submit the Assignment Request
Contact the leasing company’s customer service department and request an assignment package. This typically includes an assignment agreement (new contract between the leasing company and the buyer), a credit application for the buyer, a personal guarantee form for the buyer’s owner, and a condition acknowledgment form for the equipment.
Both you and the buyer sign the assignment agreement. The leasing company reviews the buyer’s credit, and if approved, processes the transfer. Expect this to take 2 to 4 weeks from submission to completion.
Step 4: Handle the Transfer Fee
Most leasing companies charge an assignment fee of $200 to $750. This is negotiable. Who pays it (you or the buyer) is part of your sales negotiation. In most business sales, the seller covers the transfer fee as part of the closing costs, but there is no rule requiring this.
Step 5: Get a Full Release
This is the most important step, and the one most sellers skip. After the assignment is processed, demand a written release from the leasing company confirming that you are fully released from all obligations under the lease, including any personal guarantee.
Without this release, the leasing company can still pursue you if the buyer defaults on the lease. Some leasing companies try to keep the original lessee as a backup guarantor even after a successful assignment. Do not accept this. If the leasing company refuses to release your personal guarantee, the assignment is not truly complete.
What Most Guides Miss: The Service Agreement Is Separate
Transferring the lease transfers the financing obligation, but the service agreement with the copier dealer is a separate contract. The buyer needs their own service agreement, and the dealer may use this as an opportunity to change pricing or terms.
Coordinate the service agreement transfer at the same time as the lease assignment. The buyer should negotiate service terms before completing the lease transfer, not after, because the dealer has less leverage before the buyer is locked into the equipment. For more on lease fine print to watch for, see our copier lease fine print guide, and learn about end-of-lease options at our copier lease return guide.
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