When looking for an equipment financing partner, there are a number of questions that should be asked. Sure, there are the standard financial ones: How much is my monthly payment? Will I need to put money down? What will my rate be? These are all important questions that people looking to lease should be asking. But there’s a wealth of questions that aren’t being asked that you should consider before moving forward with a loan.
How familiar is the company with the equipment you need?
Why is this important? You want a company that knows the ins and outs of your equipment and industry – and one that has a stake in the equipment you’re leasing. This means they can offer advice on choosing the right equipment - and answer any questions - before they provide financing. Big banks simply can’t do that. Choosing a company that’s familiar with your equipment will also make repairs and upgrades simpler.
What kind of support do their leasing consultants provide?
You aren’t just a number, so don’t go with a company that makes you feel that way! You’ll be working with this company for years, so it is important that you have a company who values customer service. Look for a partner with a proven record of guiding clients into the right lease and equipment, rather than one that’ll just take an order and slap you into a cookie-cutter lease. If you encounter a problem, or have questions during the life of your lease, you want a partner who will be there to answer them.
Why lease versus paying cash?
When an emergency comes up, having the cash to handle it and get your business back on track can make or break your business. Don’t let a preventable financial crisis be your downfall. Leasing allows you to keep that cash on hand to take on the unknown without sacrificing your equipment – or your business.
What are my payment options?
Before signing on the dotted line, it’s important to understand all of the payment options available to you. Be sure to ask what the various options are that may work for you and your business. Do you run a seasonal business? Skip payments may work better for you and your wallet. Or get a step payment loan so you can get the large, high-capacity equipment now, letting your equipment make you money. By asking the right questions, your equipment financing partner will be able to help you navigate through the plethora of financing programs out there.
Are there any tax benefits?
This one’s a biggie. Asking these types of questions can help save you thousands. Equipment leases are often considered an operating expense rather than a debt, meaning they allow you to qualify for certain tax benefits. The Section 179 depreciation deduction also allows leasers to deduct the cost of certain equipment as an expense on their taxes, instead of requiring the cost to be capitalized or depreciated. Be sure to ask your lender about this one!
As you can see, it’s important to know exactly what you’re getting into – not only with your lease, but also with your financing partner. Now get out there and find the next piece of equipment you need to grow your business!