Most restaurant owners want the lowest interest rates. The question is, why should you shop for the best restaurant equipment leasing rates?
The American leasing industry is very competitive and many restaurant owners still do not understand how equipment lease rates are calculated. There are certain issues that can greatly affect the rate that you get and one of them is your credit score, the quality of the asset and the type of lease that you choose to get into. The type of leasing company that you also choose to work with can affect the rate that you get.
Why You Should Shop For The Best Restaurant Equipment Leasing Rates
If you are just starting a restaurant, cash flow can be very tight and you need to get the best equipment at the best rate without having to use a huge amount of capital. When you shop around for the best rates, you are likely to land on a restaurant equipment leasing company that is willing to draft a lease agreement suitable for your current financial situation.
Shopping for the best rates also includes researching for a company that offers quality equipment and services. The best rates sometimes turn out to be the worst if the quality of services offered and quality of equipment is terrible.
Can Shopping For The Best Restaurant Equipment Leasing Rates Give You The Worst Deal?
In most cases, shopping for best restaurant equipment leasing rates actually yields results. However, there are times when this does not happen. In the finance industry, “shopping” for the best deal can lessen your chances of landing on one.
Here’s how it works. Let’s say you send your commercial credit application to five different restaurant equipment leasing companies. Your aim is to be approved by a leasing company that offers the lowest possible rate. As a result of this “shopping”, your credit score will go down because each of the leasing companies will do a hard inquiry on your credit score. When hard inquiries are done several times, they greatly reduce your credit score. Moreover, your credit report will show that five inquiries were made and each inquiry negatively impacts your credit score. This decreases your probability of being approved for a lease.
There are some restaurant equipment leasing companies that have an inbuilt automatic rejection factor into their system whereby if a customer’s personal credit report exceeds a certain number of inquiries within a certain time, their lease application does not go through.
How Do You Solve The Problem Of Credit Inquiry?
The first thing that you have to do is work with a restaurant equipment leasing company that does its own billing, documentation and credit. They shouldn’t need to shop for the best deals to approve and fund their transactions because they have their own direct source of funding.
You can also try shopping for competitive rates and not necessarily the lowest rates. In most cases, the lowest rates do not count. You might receive the lowest rates but the leasing company may be unable to fund that rate or there are other hidden charges. It is always better to get a competitive rate than to end up with a low rate that the lessor is unable to fund.
Some restaurant owners believe that leasing kitchen equipment is much more expensive than purchasing. Thankfully, some leasing companies have calculators that help you compare the overall cost of leasing versus purchasing.
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However, when you look at the bigger picture, leasing has some of the best benefits. For instance, lease agreements cover maintenance, upgrades and repairs. This is something that purchases do not cover and you have to cover the expenses yourself.
If you are not sure how to calculate rates, you are better off seeking the services of a trusted and credible financing advisor who can help you sort through a number of things that can affect your chances of getting the best restaurant equipment leasing rates.
LeaseQ has made things a lot easier because you can compare lease quotes directly from their website. They are one of the biggest online resources of leading financing companies in North America. You can visit the website as many times as you like until you find a plan that suits your restaurant.
For more information on why you should shop for the best restaurant equipment leasing rates, simply CLICK HERE.