Business equipment leasing is a cost-efficient way to finance a business. Learning the right strategies can help you cut back your equipment leasing costs, so you can save your business budget even more. Check out the following tips on how you can spend less from your next equipment lease:
1. Choose a business equipment leasing company carefully. A poor choice of a lease partner can prove to be costly. For instance, if you submit your lease application to a leasing firm that does not offer services to businesses like yours, your application may get rejected. The result is a delay with the processing of your lease which could have been avoided if you have conducted research before submitting application.
Make sure that the leasing company caters to businesses in a niche where you belong. If you own a new business or a start-up business, look for a lessor that offers special lease programs for new and start-up businesses. Remember each time a finance company pulls your credit, your credit score will drop. Even if you are an established business hoping to be approved for an equipment lease in your business name only, many finance companies will still want to see the owners credit before approving a “corp only” lease.
2. Compare the lease costs. You can request for a free pricing quotation from at least three potential leasing companies. Spend time doing research before you pick your top three options. See to it that the leasing company is licensed and has a good reputation in the industry. After investigating about the lender’s background, you must then compare the rates and fees of the lease program.
3. Consider your business credit. If you have credit problems, take note that some leasing companies will refuse to work with you. You must look for a lessor that offers special lease programs for businesses with bad credit history. Nevertheless, having bad credit can significantly affect the rates and fees of your lease. As much as possible, try to improve your credit or raise your Paydex score before you submit your lease application.
If you really need to acquire business equipment lease at the moment, you must make sure that you do not have any outstanding debts with your present creditors. Take note that your credit problems should be in the past in order to be considered. If they are not, be prepared to submit a letter of explanation along with proof of your claim.
What if you do not have business credit history? It is possible to find leasing companies who are willing to extend lease financing to start-up businesses and businesses with no credit history or have yet to build business credit.
4. Negotiate for a better deal. You should always try to negotiate for a lower rate or easier repayment term before you sign up for an equipment lease. If you have good business credit history and if you are managing an established business with an excellent reputation, you should definitely use these assets to your advantage to enjoy savings from your next lease. Many leasing companies would want to work with you and would be willing to give you the best possible lease package they can give just to have you as a customer.
What if you have bad credit or no credit history? Even if you have bad credit history, you should request for a lower rate than the initial offer. If you own a start-up business, it will never hurt to try to negotiate for a lower lease price.
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