If you are part of the 80% of businesses that use leasing as a means to finance your equipment, do you know the three things about equipment leasing companies that could help you achieve maximum rates, structures and terms for your business?
Most businesses in North America know all about the benefits of leasing business equipment in the American market place. If you do not know what these benefits are, then you should. However, just a quick reminder of what the benefits are:
- Tax benefits
- Cost saving benefits
- 100% financing
- Lower cost financing
- Off-balance-sheet financing
The three things that you should know about equipment leasing companies are:
- They allow customers to pick their own lease rates
- You can finance any asset
- The leasing company that you choose to deal with will decide whether you have been successful in negotiating the best lease financing deal
Three Things You Should Know About Equipment Leasing Companies
You Can Pick Your Own Lease Rate
Many business owners still ask how is it possible that you can pick your own lease rate? This doesn’t mean that you can just go to any leasing company and demand the lowest rate. What this means is that there are many leasing companies out there all willing to stay competitive in the market. What you can do is compare lease quotes from different firms and settle for the one that suits your business.
Another thing that can help you choose your own rate is your credit score. A good credit score always gives you a better negotiating position. A bad credit score will only attract high interest rates. You can even achieve better rates if your business has a growing cash flow, growing profits and growing sales. Your ability to project future cash flow is perhaps the largest contributing factor to lease approval and getting the best rates.
Understanding where your firm is at in matters regarding sales growth and profits will allow you to properly project the fact that you deserve the best rates available. Equipment leasing companies sometimes have a habit of using terminology and rate factors that even people in the leasing industry get confused on. Terms such as effective rate, bargain purchase option, down stroke, full pay-out, etc., all sound like technical jargon to someone who is not familiar with those terms. In such a case, it would be in your best interest to utilize the services of a trusted business lease financing advisor who has a wealth of experience in the leasing industry.
You Can Finance Any Asset
Most business owners are not aware that they can finance used, new and refurbished equipment. Financing of used equipment in North America is a huge business. You can even include soft costs in your business. Software is one of the largest soft cost leasing components in the industry today. It comes as no surprise that many business owners are not aware that they can finance software.
When it comes to financing equipment for your office, hospital, restaurant, etc., equipment leasing companies can include delivery, installation, warranty, and maintenance as part of your overall lease financing strategy. Customers invest thousands of dollars only to later find out that they could have saved that valuable cash flow and included it in the lease.
The Equipment Leasing Companies You Work With Will Determine If You Get A Good Deal
Leasing in North America is fragmented and diverse. Some equipment leasing companies might do business locally, some might do business locally but be foreign owned and funded and others may only specialize in leasing certain type of assets. You should do your homework and find out whom you are dealing with to ensure that you have a proper match with your required lease financing benefits.
Some of the things that you should find out about your leasing company are if they have any hidden costs. Some companies will draft agreements with small hidden costs that according to you may not amount to anything but when summed up, may actually amount to large sums of money. Another factor to consider is the kind of experience the leasing company has. A company that has been in business for more than three years is solid enough. This means that they have customers who are keeping them in business. Being well informed on these three crucial areas will definitely guarantee you lease financing success.
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