How to Save on Your Next Equipment Lease

The Equipment Leasing and Finance Association reports that businesses in the US spend an estimated $200 billion on equipment financing – that includes larger vehicles such as commercial airplanes down to the smaller devices such laptops and computers.

Whether this is your first time to apply for equipment lease financing or you are planning to renew your contract, below are essential tips on how you can save money from your next lease:

1. Partner with the right Leasing Company.

Start by working with a trusted lessor. Making the wrong choice can result to unexpected delays with the processing of your lease; paying higher rates; unsatisfactory lease package; untimely delivery of the leased equipment; and other complications.

It is very important to spend time looking for an equipment lease company that has been in the industry for a considerable length of time; is known for providing great service; and one that specially offers service to the exact type and size of business you own.

2. Evaluate the deal.

Equipment lease packages vary, depending on the terms and conditions. You can save more money by choosing the package that best complements the demands of your business.

For example, are the rates and prices affordable? Will you be able to choose a repayment term that accommodates to your financial capability? What are the terms with regards to obsolescence, equipment usage, replacement, returns, and end-of-lease options?

3. Know your credit standing.

If you have been in business for at least a year, then be ready to present a good business credit standing. Having good business credit will surely work to your advantage not just in getting quick approval but in negotiating with potential lessors as well.

What if you have poor credit history? There are companies that do offer equipment lease financing for bad credit. Before submitting a lease application, you need to make sure that the lessor does provide leasing services for those who are credit challenged. Submitting your application to the wrong company could mean rejection and may only do more damage to your credit score.

4. Go With a Short Lease Period.

Keeping your end-of-lease period short will give you more flexibility to decide your next move. Will you return the equipment or renew your contract? If you’re not so happy about the service, you switch to a new lease provider without having to pay penalties for breaking your lease. On the other hand, if you want to stay with the same provider, you can simply give advanced notice that you wish to renew contract and renegotiate the deal.

5. Cut down the Interim Rent.

The interim rent is the cost you incur from the day your leased equipment are delivered to your place until the day your lease term officially starts. Even a few days can add a significant cost to your bill. One strategy you can do is order your equipment by the month’s end as most lease terms start at the first day of the month. You can also request your lease provider to set a limit on your interim rent (from 10 to 15 days) regardless of when you receive the equipment.

 

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