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Evergreen Clause

Don't get tricked into Auto Renew Lease Agreements!

Innovative Lease Services, Inc. is a premier provider of Commercial Equipment Leasing and Financing for businesses in all 50 states. We believe in “Innovation with Integrity” and seek to deliver valuable products with mutual benefit. In direct conflict with our business philosophy is a practice many of our competitors utilize and we wish to educate you about it so you may make a fully informed decision when it comes to choosing an Equipment Financing partner.

Why are we telling you this?

For one main reason; we want to earn your current and future business. Our company believes in a clear contract whose terms and conditions are in line with your expectations. We also believe in relationships, not just individual deals. At ILS, we believe you’ll appreciate our approach to Business and the Equipment Leasing and Financing products we provide.

What is the "Evergreen Clause?"

Assume that you are a Business Owner and have entered into, or are about to enter into, a Commercial Finance or Commercial Lease agreement. You would likely assume that your Commercial Equipment Financing contract will be billed by your Lender only for the stated term and buyout on their lease agreement.

Indeed if you were booking you’re financing with Innovative Lease that would certainly be the case. For many customers however that is simply not the case!

Enter the “Evergreen Clause”, the Industry term for contract language that automatically renews a lease or finance obligation beyond the original lease term. The contract language varies by lender (see some actual examples below) but the common thread is that the monthly payment obligations automatically renews for additional periods of time (often 12 months) unless specific notification is provided to the Lender.


This obligation is rarely emphasized to you when you sign the contract and likely you are unaware of this provision. Because of this, many customers do not realize their contract has extended beyond its original term. Most Business Owners are busy running their companies, not complying with the “fine print” in their contract.

In fact some estimates are as high as 60% of customers with an “Evergreen” provision in their contract auto-renew.

Image by Sebastian Unrau

Example Evergreen Auto Renew Clause

Each Term shall automatically renew for subsequent periods of the same length as the initial term unless either party gives the other written notice of termination at lease thirty (30) days prior to the expiration of the then-current Term.

ILS will never do this!

Not all Equipment Financing companies use this tactic, many do not. However, you would be shocked by National Banks and Publicly Traded Companies that employ this “fine print” technique.

How this affects your business?

Really the education on “Evergreen Clauses” can benefit you in 3 ways:


Avoid signing contracts with these provisions. Innovative Lease does not use evergreen language in its lease agreements. We believe you’ll appreciate a financing product that is up-front and without any automatic renewal provisions.


You are currently in a lease with an “Evergreen Clause” and you can re-read the fine print and make sure you comply with often cumbersome notification provisions required by the Lender (see examples below).


You are making monthly payments after the automatic extension of your original contract term. If this is the case, you’ll need to contact your lender regarding your remaining obligation but at least you are now aware of it.

Actual Samples of "Evergreen Clause" Language:

Example 1

"...You must notify us by certified mail between 90 and 180 days prior to the end of the Lease Term if you intend on returning the equipment. If you do not notify us, the Lease will automatically extend for 12 months..."

Example 3

"...No more than 180 days and no less than 90 days prior to the end of the Term, Lessee shall give Lessor written notice of Lessee's intention... If Lessee fails to so notify Lessor or, having notified Lessor, Lessee fails to return the Equipment at the end of the Term... at Lessor's option automatically renew for another 6-month period under the same terms and conditions..."

Example 2

"...The term will be extended automatically for successive 12-month terms unless you send us written notice you do not want it renewed at least 30 days before the end of any term..."

Example 4

"...On or before one hundred twenty (120) days prior to expiration of the initial term of this Lease, Lessee shall give Lessor written notice by certified mail of Lessee's intention to return the Equipment to Lessor... If Lessee fails to notify Lessor as provided herein, this Lease, at Lessor's option, shall renew for additional terms of on hundred twenty (120) days each at a periodic rent equal to the periodic stated herein...

The Financing Process
1.  Apply Online

2.  Finalize Documents

3.  Receive Financing
Don't wait a moment longer to give your business a boost!
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