Leasing has developed into a preferred way of equipment financing, comprising over 30% of business equipment acquisitions. Every year, thousands of U.S. companies face task to find attractive financing to get business equipment. Many of these companies approach the lease sourcing process seeking the lowest lease rate. While securing a minimal minute rates are a rewarding goal when choosing a leasing arrangement, it alone is usually not just a reliable standard for acquiring the best lease transaction or leasing experience.
To have attractive lease-ups proposals and avoid lease blunders, be sure you choose the best leasing companies to bid. Ultimately, a bad lessor choice may lead to painstaking approval, inability in the lessor to deliver, hidden fees, substandard lease terms, or worse. To secure the very best lease arrangement, you must do investigation in pre-qualifying bidding leasing companies. Give this facet of obtaining a stylish lease arrangement your highest priority.
How Leasing Companies Differ
Leasing companies may vary in a lot of ways. Some specialize in specific industries, some in lease types, some in certain equipment types, and still others in transaction sizes. For example, some leasing companies specialize only within a industry like health care, printing, agriculture, or transportation. Others focus exclusively on a lease type. They could offer only operating leases for equipment with attractive residual values. Some lessors focus on full-payout finance leases. Still others focus on small ticket transactions with equipment cost under $ 100,000. It is important to view the specialization with the lessors bidding on your lease transaction. To have the most attractive deal and also to stay away from the run-around, keep with lessors who pinpoint the kind of transaction you are searching for.
Leasing companies also differ in resources and capabilities. Many large leasing organizations are of banks, financial companies, or another large industrial concerns. These companies usually have abundant resources and knowledge of a number of leasing segments. Mid-size and smaller leasing companies greatly outnumber large lessors. While these lenders cannot match the means of the larger brethren, they generally have very skilled professionals, sufficient resources and much more flexibility to meet lessee needs. Desire to would be to acquire the best leasing arrangement for your firm. By establishing priorities for your leasing arrangement you are looking for, it is possible to discover whether a leasing firm with sizeable resources or one that’s nimble and flexible is a better choice.
Location To Look
Time to start your search for any leasing firm is at the beginning of the lease-planning phase, once you’ve established criteria to get a leasing arrangement. Some criteria to think about for a leasing arrangement are: pricing, monthly cash outlay, financial statement impact, the proper lease type, lease term, lease flexibility, lease facility size, and whether your equipment will likely be accepted for lease. Use criteria such as these as well as the qualities you would like in a leasing company to get started on your lessor search.
An incredible starting place for tracking down bidding leasing companies is through personal and professional referrals. Seek advice from your attorney, an accountant, bank contacts and colleagues within your industry. Also ask friends and acquaintances who use leasing in their businesses. Asked them for contacts at leasing companies that focus on your industry or that supply the sort of lease you are seeking. Call your industry association and have when they’ve names of leasing companies serving others inside your industry.
Evaluating Leasing Companies
Qualities to consider in different leasing company you take into account include: 1) experience and expertise; 2) reputation; 3) ability to perform; and 4) a partnership approach.
Interview prospective bidders carefully. Discuss their expertise and experience from the leasing business. Enquire about knowledge of the kind of transaction you are searching for, involvement sticking with the same firms within your industry, along with the kinds of lease products they have firms like yours. Discuss your equipment needs. Uncover if they will be able to lease the majority of the equipment you need. Ask whether they will finance your lease using internal funding or if they are going to broker the lease to a different funding source.
Get enough information from contributing to bidding lessors to choose whether or not to include them in the bid process. Whenever possible, require financial information from potential bidders to guage their financial condition. Also, if you’re able to, get yourself a Dunn and Bradstreet report (“D&B”) for each bidder. Within the D&B report, look for lawsuits filed against the lessor, judgments, severe payment delinquencies, poor financial performance and other conditions might impact performance over a new lease transaction.
Obtain and check customer, vendor, bank and trade references for each and every lessor. Contact each reference and verify key information provided to you through the lessor. Ask the way the lessor handles its account and whether there’ve been any problems or issues. Ask customer references about the lessor’s power to perform contributing to attentiveness to customer problems and concerns.
Investigate bidders online. Check Google (www.google.com) to view whether prospective bidders come in any newsworthy articles. Hit what it’s all about boards and newsgroups. Try to find unresolved problems, fraud, financial problems, accounts of success, and awards. Visit bidders’ websites to acquire just as much information as you can before extending a party invitation to bid. You could be capable to screen out undesirables.
Lastly, be sure prospective bidders are part of a number of industry trade association. While membership alone doesn’t speak for that integrity or expertise of members, most of the associations set standards of conduct for members.
One word About Lease Brokers
Lease brokers serve roles much like insurance brokers. They profit by placing lease transactions with all the ultimate financing sources for anyone transactions. You should decide whether a lease broker would assist you better than seeking direct bids from lessors. Lease brokers can be useful in finding sources for difficult transactions, due to weak credit or unattractive equipment. They can also come in handy in placing transactions which might be highly specialized. Only help lease brokers who’ve high integrity, who’ve a fantastic idea of leasing, and who comprehend the market you have.
The entry bar for being a lease broker is pretty low instead of all brokers are very well trained or reputable. Check the broker’s references and capabilities thoroughly. Check to see if the broker is probably the national trade association for lease brokers, NAELB (www.naelb.org) or to one of the other major equipment leasing associations. Make use of the same guidelines for evaluating brokers as outlined above for leasing companies.
Parting Words Of Caution
Avoid high-pressure lease sellers. Whether or not they are brokers or leasing company representatives, the chances individuals being misled or disappointed together with the outcome are extremely high. Only help lease representatives or brokers that have a fantastic comprehension of leasing and that are sensitive to your requirements. To perform otherwise might result in delays or disappointment.
Avoid giving lease deposits or advance rentals to brokers. Brokers do not provide you with the financing directly and, in possession of your money, represent a possible credit risk.
In the event the lease broker or leasing representative says any situation that creates a significant misrepresentation, leave. It’s likely that the very first such misrepresentation won’t be the final. There are a lot of knowledgeable leasing professionals with high integrity. Avoid being with those who are unprofessional.
Lastly, make sure you get a minimum of three or four lease bids from qualified lessors, if you’re able to. After your day, lease costs are market driven. Getting several bids will help ensure that you get competitive pricing and terms.
Deciding on the best leasing firm is definitely worth the effort. If you take a couple of basic steps during the planning and bidding phases of the lease procurement process, you are able to eliminate or reduce time wasted with unqualified lessors. You can also needn’t be the run-around. Allow lots of time to check carefully out all bidders. Be a fan of lessors with higher integrity, great reputations for performance, good expertise and who communicate well together with you. You may invest some time upfront, but you will be thankful later.