Financing options encourage clients to make greater purchases, giving equipment providers a competitive edge. Consider introducing leasing as a consumer option or improving your present leasing program to better serve your customers. As you weigh your alternatives, bear in mind that not all leasing partners are created equal. The following advice will help you make the best option for your company.
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When picking a leasing provider, consider your organization’s specific demands. If your products do not fulfill the following requirements, leasing may not be for you.
Expected contract duration depending on equipment life A lease program may not be feasible if the contract period exceeds the equipment’s life. For example, it makes no sense to finance a laptop for 7 years, but it makes sense to finance a huge printing machine.
Vendors should bundle their products for a certain time period to provide for an upgrade option at the conclusion of the leasing term.
Know Your Players
Brokers, independent Equipment leasing businesses like Crestmont Capital, and financial institutions are the key actors in equipment leasing. All three finance sources are good options for financing equipment leases. They collaborate with a variety of financing sources.
A broker will offer a wide range of financing solutions for your consumers. They can probably finance your consumers since they deal with a few financial providers that have relationships. The drawback of dealing with an equipment leasing broker is that after the lease is paid, the broker is out of the picture.
Independent Leasing Company
They frequently charge or collect rent and oversee the decision-making process for their clients, as well as any minor adjustments to the paperwork. Also, you may develop a more tailored program for your consumers.
These institutes will offer particular programs. If you and your consumers fit inside their restrictions, this is a great alternative. The drawback is that enormous institutions may shift quickly, particularly now. If they decide not to finance your particular equipment, you might lose aEquipment leasing partner overnight. Larger banks and organizations will have stricter credit and paperwork policies.
As you and your business expand, you may discover that a broker is an ideal solution for your needs. As your company expands, a banking institution may be preferable. Consider each of these factors to enhance your client service and your own company benefit.
Know What Your Customers And You Expect
Most leasing companies enable you to add warranties, installation and training to the equipment cost. Most leasing businesses prefer to keep these charges under 20% of the entire lease cost. Some leasing businesses go up to 50%. Discussing choices with a prospective partner helps them understand your company.
Pre-funding allows the vendor to advance cash on the contract upon return to the leasing company. Some companies will get 50%, while others will gain 100%. Inform your leasing company of your precise cash flow demands and delivery time. A leasing business would not want to advance cash if your product delivery and installation takes 6 months, but if you have a 2 week timeframe, they should.
Leasing businesses may utilize residuals to cut customer payments and allow them to return or acquire equipment at the conclusion of the lease. The buy option is a great technique to generate a sale at the conclusion of the lease. Some companies let the vendor 2-weeks equipment back from the leasing company.
