FAT-WHYME

Choosing the Right Equipment Leasing Partner

by Tom Williams

Financing options encourage customers to commit to increase purchases on average, providing equipment suppliers an advantage over their competitors. To increase your business, you may consider adding leasing as an option for their clients, or modification of their current lease program to better serve its customers. When considering your options, keep in mind that not all rental partners finance are the same and need to find a partner and will be best for his client. The following points will help you make the right decision for your business.

Tip # 1: Prepare to Compare

In choosing a leasing company, it is important to understand the unique needs of your business. Lease may not work well for you if your product offering does not meet the following criteria:

Product Offering

Suitability

equipment value is below $ 5,000 in value

Equipment less than $ 5,000 is not attractive for a company to help because these amounts are often paid by credit card or network accounts.

value of the equipment is less than $ 100,000

If your products are below $ 100,000, most companies are not going to provide that the financial statements. Usually, you use a credit scoring program for approval.

Over $ 100,000 in equipment cost:

Normally most leasing companies will want to examine the financial statements to approve a customer when the equipment cost is more than $ 100,000 .. In general, you want to review the financial statements 2 years

expected length based contract in the life of equipment

A leasing program may not be viable if it requires a contract length that exceeds the duration of the team. For example, it would make sense to finance a laptop for seven years, but it may make sense to finance a large print for that long of a term.

As a seller, it is important to package their offerings for a specific period of time, because it creates another opportunity to improve care customer at the end of the lease term.

Tip # 2: Know the Players

There are three main actors in the equipment leasing industry: brokers, independent leasing companies and financial institutions. The three alternative funding source provided excellent opportunities for financing the lease of equipment.

Corridor

Brokers are intermediaries who work with multiple sources funding.

The advantage for his client is a broker will have a variety of financing options for their customers. Chances are that the capacity finance their clients because they work with a few funding sources with contacts. The disadvantage of working with a computer leasing agent once the contract is lease is funded with the broker, which are outside of the image in terms of decisions regarding the lease in the future.

Leasing Company

Independent companies get their funds from bank lines and / or investors.

A leasing company usually has or collect rent payments and take control of the adoption process for their customers, and changes subtle in the documentation if necessary. In addition, it also allows you to create a more personalized program for their clients.

Institution Financial

Financial Institutions are the largest in the area of leasing equipment such as Wells Fargo, U.S. Bancorp and GE Capital.

These institutions will have specific programs available. However, it will be more rigid in most cases on the requirements of their loans: If you and your customers fit within the parameters, this is an excellent choice. The drawback is that big institutions can make rapid changes, especially in the market today. You might be a rental partner overnight if they decide they no longer want to finance your specific hardware. Most banks large institutions are going to have a more rigid policy for credit and documentation.

As you and your business grows, you may find a runner is the best option for always on the basis of their needs. Perhaps a financial institution may work best as your business grows. Consider each of these partners to ensure that you have maximized the service that can provide their clients and their own business advantage.

Tip # 3: What is required know you and your customers

Most leasing companies will allow you to include services beyond the cost of equipment such as security, installation and training. Most leasing companies want to keep these costs by 20% of the total cost of the lease of equipment. Some leasing companies Financial go as high as 50%. It is a wise business choice to discuss the options with your potential partner in advance so you understand your business.

Pre-financing is the ability to advance funds to the seller in the contract as soon as the contract is sent back to the leasing company. Some companies advance of 50% and some can reach 100%. Let your rental company to know your cash flow needs, along with your desired delivery time. Leasing company can not be you want to advance funds if you have six months for the product to deliver and install, but if you have a shorter window, such as two weeks, we must be willing to advance funds.

Leasing companies can also use waste to help customers lower their payments and enable them to return the equipment at the end of the lease or purchase if you like. The call option is an excellent way to create a sales opportunity for the end of the lease. Some companies allow suppliers to re-purchase the equipment from the leasing company.

Tip # 4: Stay Safe & Smart

þ Facility Contract

Ask to see a copy of the contract for the leasing company uses for funding. Make sure you understand the terms and options for its customers. If you is well informed with the lease, the smoother the process to get the equipment you need for your company to excel. It is also important to understand the implications of the contract, the notification policy for the residual payment and purchase options. Most companies are easy to understand leases, but note that some have hidden conditions.

Get references þ

Ask the leasing company which is working for references. Compare leasing companies to find other similar amounts and dollar amounts of annual sales so that you can find leading leasing company that meets your business.

Þ Verify Qualifications

Whichever you choose, make sure they are members of at least one of the partners tenure as NAELB, UAEL, Raoul or ELFA.

þ Do not let your customers go it alone

At a minimum, you must have a leasing company to refer customers if you do not have an established relationship. Any effort you make to create a relationship now will pay off in big dividends. Having financing options is a sign of his client who cares about their needs.

The world of equipment leasing does not have to be intimidation or a black box process. By taking a few minutes to talk to the leasing partner, you will see the process is very easy. Like any relationship, especially in business, it is important to make sure you know what you need and what you want. Knowing this, you can provide your laundry list and see if the company Leasing can accommodate or at least meet you halfway. It has been demonstrated over the years that companies that rent sell more equipment. Equipment purchasing and leasing go hand in hand because it's all about cash flow and the relationship between your customer, your company, and equipment leasing company of your choice.

About the Author

Tom Williams is President of eLease Equipment Leasing. He was inducted into the Leasing Hall of Fame for his work pioneering the use of the world wide web to help entrepreneurs fund their businesses. Tom purchased equipmentleasing.com in 1995 and began the era of offering business equipment leasing and financing online.

He has a degree in Economics from Boston University, has been quoted in the Wall Street Journal, Red Herring and Business Times, and is a frequent speaker on e-Commerce and Equipment Leasing on the national circuit. Tom writes regularly on his equipment leasing blog. He is also a proud member of equipment leasing associations UAEL and NAELB.

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