Follow these 5 steps to get started using equipment leasing and finance to your strategic advantage. Consult 10 Questions to Ask for more information.
1. Consider how you will be using the equipment
Determine how your company will use the equipment you plan to lease or finance, and the length of time you'll need it. To help decide if leasing or financing is a profitable financing option for you, perform a simple cost/benefit analysis by comparing the anticipated costs to the revenue you expect to generate from using the equipment.
2. Find an equipment finance partner who understands your business
It is beneficial to work with an equipment leasing and finance company that understands your particular market. The company's understanding of market fluctuations and other factors that impact your business can greatly affect the successful outcome and desirability of your lease contract. It is also important for the company to understand your business's tax and cash flow requirements and be able to set the residual rates (the value of leased equipment at the end of the lease term). Your equipment financier can serve as a valued consultant, providing additional benefits through lifecycle asset management solutions. Find a Provider who meets your needs.
3. Calculate your total payments and costs
To eliminate any future misunderstandings, it's important to understand the number of payments you will owe, the total monthly payment due and any additional costs related to insurance, taxes and other charges. In addition, find out if there are additional costs associated with the lease or finance transaction that may occur during the course of the agreement term, including late payment fees and other surcharges.
4. Understand the terms of your agreement
You should know your company's liability for the equipment you are leasing or financing before you sign an agreement. Be sure the conditions are clear and included in your agreement, and review these provisions with your equipment finance company representative. Consider questions such as:
- Will your equipment finance company assume the costs for the equipment's insurance, taxes and maintenance?
- Will the equipment finance company handle installation, maintenance, asset management and tracking, and other services, or are these services my obligation?
- How can I upgrade or add equipment under this agreement?
- What are my options at the end of the agreement?
- What procedures must I follow if I choose to return the equipment?
- Are there any extra costs at the end of the agreement?
5. Close the deal
Once you have answered key questions and determined that equipment leasing or finance can benefit your company, it's time to start enjoying the benefits!