7 Tips & Tricks to Know About Business Equipment Financing & Leasing:
Leasing and financing equipment is a great way for smaller companies to be able to afford the equipment that they need to be able to do their jobs more efficiently. Many times, businesses who cannot afford to buy the equipment outright can lease the equipment for a much more affordable monthly payment until they either don’t need that equipment anymore or are able to upgrade and buy their own piece of that equipment.
The following are 7 tips and tricks to keep in mind if you are a business owner looking to lease a piece of equipment that you either can’t afford or won’t need in the long term:
• Clearly describe the piece of equipment you need for the company you are leasing it from. Describe your minimum requirements so they can give you something that meets your needs but doesn’t do the “extra fancy stuff” that’s likely to cost your company more money than you need to pay.
• Check your credit reviews/report before you go to lease equipment. If your company has a poor credit score you will be paying more for the lease than you would if you had a good credit score.
• Check several different companies to see what terms and conditions they offer for leases. Don’t assume the first place you go gives you the best offer. Someone else may give you a better offer. Shop around to find it.
• Ensure you are checking your business credit history for any errors or false reports of actions that were not taken by you or one of your employees. Errors can happen and it can lower credit scores. If you see incorrect information check with the company to have it fixed. If you see any negative information be sure to be ready to explain it to the leasing company.
• Only submit one lease at a time. Submitting more than one lease at a time can raise questions as to why there are other leasers that you feel will reject your application or have rejected your application in the past.
• Study up and know the difference between a fair market lease and a $1 purchase option lease. A fair market value will already provide a fair monthly payment and will provide you with the most flexibility in making payments and provide a positive tax incentive for your company as well. There may be other market incentives to using these fair market value incentives as well.
• Sometimes if you combine multiple offers into one you are able to get a better deal if you lease the equipment from the same company. Engage the company you are leasing from in conversation can get you the best possible deal if you are willing to lease all your equipment from them.
These are just a few tips to keep in mind when you are leasing equipment for your company. Shopping around to find the best fair market value for your lease is the best way to ensure that you are getting the deal you deserve without getting yourself into a deal that you might have otherwise wanted to avoid.
For more information on leasing equipment for your business please feel free to Capital Financing Solutions for further assistance.