According to The Equipment Leasing Association a large number of businesses in the US use equipment lease financing. The report shows that over $200 billion worth of equipment are leased by companies each year.
Are you a small business owner? If yes, consider the following tips on how you can save more from your equipment lease:
1. Choose the Right Leasing Company.
If you choose the wrong leasing company, you may encounter problems later on. For instance, there could be delays with the approval of your lease application or the equipment you ordered may not be delivered on time. There are lease providers that charge hidden fees and do not give a reliable service. To find the right lease provider, use the internet to shop around and check the company’s reputation and track record of service.
2. Choose the Right Lease.
Lessors offer varying business equipment lease packages. Compare the pricing, repayment options, and the specific terms of your chosen leasing company. Pay special attention to special conditions such as end-of-lease and lease termination options, obsolescence, etc.
3. Choose a Short Term Lease.
A short term lease enables you to decide whether to renew your contract or to find a new leasing company to partner with. Signing up with a long term lease contract limits your options. You may have wait until the end-of-lease term before you can break free even if you’re stuck with poor lease condition.
4. Cut Back on Your Interim Rent.
The Interim Rent is a daily cost from the time the equipment has been delivered up to the official starting date of your lease. Most leases start at the first day of the month so you can cut back on Interim Rent costs if you try to schedule the equipment delivery by the end of the month. Another option is to request a limit on your Interim Rent (10 to 15 days) regardless of when the delivery was made.
5. Check All Fees.
Understand all the fees associated with your lease such as commitment fees,non-use fees or facility fees, late rental penalties, early termination penalty, etc. Compare proposals from different lessors. If some charges are not found in other proposals, negotiate with the lessor if you can have those charges waived or reduced.
6. Return or Buy Provision. Will you have the option to either return or purchase the equipment (at a lower price) at the end of your lease term? You need to be clear about these provisions right from the beginning.
7. Ask for a discount. Save more money by asking for a discount. If you have an excellent credit rating or if you have been a long time customer, always negotiate for a better deal.