Regardless of how big or small your business is or how long your business has been in operations, equipment lease financing is worth considering. In fact, many successful corporations today lease equipment to cut back costs, decrease their tax liability, stay on budget, and improve the use of their working capital.
How can leasing business equipment enable you to save money? Purchasing business equipment often requires a considerable amount of money and if you have a limited budget, you might have to invest a large portion of your working capital to purchase your equipment. If you are “saving up” to buy that new equipment, you may even miss great business opportunities due to the fact that you do not have enough working capital to purchase the equipment when you need it.
On the other hand, you have the option to lease or “rent” the equipment you will need for your business operations so that there is no need to spend a great deal of money upfront. Business equipment lease financing gives you the opportunity to pay a small monthly payment and you get full use of the equipment at the same time.
Finance Your Small Business through Equipment Leasing
Leasing business equipment is generally easier than applying for a business loan. While applying for a business loan can take a month to a few months to complete, sometimes requires a large down payment and lots of collateral, applying for equipment lease takes only a few days and funding can take place in as little as a week from the date of submission.
Even start-up businesses can acquire lease financing and obtain all the necessary equipment needed to begin the business operations. Do you own an established business and are planning for expansion? If yes, then you can greatly benefit from your businesses established credit history and the tax benefits that come with leasing.
Tips on Equipment Lease Financing
If you have decided to lease equipment, consider the following tips on how you can get a faster approval and find the best lease package.
Consider the leasing company’s requirements. Some leasing companies only accept customers with good credit history. If you own a start-up business or have yet to establish business credit history, see to it that your chosen leasing company offers a lease program that matches your qualifications. Even if you are an established business, but have no credit history thus far, you will be considered a startup business unless you can provide trade references. It’s a good idea to open a Dunn & Bradstreet account and have all your trade lines listed before you apply for any type of financing.
On the other hand, if you have bad credit problems, you should find a lessor that offers special lease programs for businesses that are credit challenged. Most leasing companies that offer bad credit lease programs will only consider your application if your bad credit problem is already in the past. If your credit problem is NOT in the past, be prepared to provide a letter of explanation and any documentation you have to prove your claim.
Compare different lease packages. Lease packages may vary depending on the leasing company. Other factors that can affect your lease terms and pricing are the type of business you own, the amount of lease you need, the age of your company, business credit history, etc.
Aside from the price, you should also evaluate the specific terms and conditions of the lease. Once you have decided on a lease partner, be ready to negotiate. Unfortunately many new businesses and credit challenged businesses do not have the options to negotiate MUCH. It never hurts to ask, you maybe able to save some money on the administrative fees.
Do not immediately accept the initial offer. You can cut back a great deal from your leasing costs if you at least try to negotiate with a potential lessor before signing the contract. This works best for established businesses with good credit.
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