How to Choose the Right Equipment Leasing Company

Leasing has become the primary type of equipment financing for many organizations, accounting for more than 30 percent of all business equipment acquisitions. As a consequence, there are a lot of finance partners offering equipment leasing services, and you’ll need to narrow down your search effectively if you decide to go down this route.

What is equipment leasing?

Equipment leasing is a form of financing whereby the business owner will lease the equipment instead of purchasing it outright. 

Leasing allows businesses the opportunity to acquire what is typically very expensive equipment – such IT equipment, construction equipment, medical equipment, and manufacturing equipment to name a few.

By leasing, businesses pay manageable monthly payments for the equipment they need, which is extremely helpful in preserving cash flow. With the most common lease structure, payments are fixed each month, which can help keep monthly payments consistent and predictable.

Depending on your agreement, you will either return the equipment, purchase it, or renew your lease at the end of your contract.

The benefits of equipment leasing

The main benefits of equipment leasing are as follows:

• Access to equipment you would not be able to afford outright
• Manage your cash flow with fixed monthly payments
• A significant down payment is not typically needed
• Leasing is ideal if you need to update equipment continually
• You can manage spikes in demand or lease equipment for short periods
• Equipment leases can often be eligible for tax credits

Choosing the best leasing company for your needs

However, there are a lot of equipment leasing companies on the market today, so it can be a bit overwhelming when picking the right one for your business. Here are some of the factors you need to consider:

Experience

The first factor to consider is the level of experience the company has with equipment leasing. The last thing you want to do is be someone’s practice project. You want to make sure that they have worked with businesses of your size and or in your industry before and that they have a good reputation. It can take companies years to hone their leasing packages and the equipment they are able to offer, so it makes sense to go for an established business when it comes to a service like this. 

Turnaround Time

Next, you should find out about their typical turnaround times. How long will it take for your leasing contract to be evaluated and approved? How long will it take for the equipment to be delivered to your business premises? Turnaround times can differ considerably depending on your industry and company, so it is important to inquire about this prior to signing an agreement. 

Equipment Lease Rates & Fees

You also need to consider equipment leasing rates. There is no one-size-fits-all solution when it comes to leasing. Your lease agreement needs to be structured according to revenue forecasts, asset lifespan, and equipment type. You will want to make sure that the leasing rates are competitive and are structured to suit your business needs. 

Credibility and Reputation

Take the time to do your research. Make sure that the company has been delighting customers with the service they provide. You can easily do a search of the leasing company online. You will then be able to read reviews that have been left by others. Use independent review platforms so you can be confident that the feedback is genuine. And lastly, ask for referrals and to speak to current clients of theirs. If their current clients won’t speak to you – chances are they wouldn’t be eager to recommend them.

Contract Terms and Conditions

Last but not least, make sure you take the time to read the contract in full. We have all been guilty of skimming over a contract from time to time. However, if you do this, you could end up missing a critical piece of information. Your contract should state all of the important details regarding contract length, monthly payments, what happens if you miss a payment, renewal options, and much more. 100% Transparency is critical from the start – your leasing partner should have nothing to hide. If there is a discrepancy, bring this up with the leasing company and get the contract amended (if necessary) before you sign on the dotted line.

Final words on choosing the best leasing equipment company for you

So there you have it: everything you need to know about leasing equipment companies and how to choose the best one. If you consider the factors that we have mentioned above, you should be able to narrow down your search effectively and enjoy a cost-efficient and stress-free leasing experience.