Capital equipment financing and leasing is offered by various different companies across the country. This leaves you with the difficult task of finding the one that is best for you. You need to make sure that you get the best rates and terms and conditions, which in turn depends on your credit rating, but also on the assets you want to finance. So how do you find the right one?
Finding a Capital Equipment Financing and Leasing Company
The first thing you have to do is understand what type of lease you want. Usually, this is one of two types:
- Capital leases. This means that, once your lease term is over, the equipment is yours.
- Operating leases. This means that, once your lease term is over, you return the equipment.
If you understand how lease companies make their money, you will also be able to get the best possible deal out of it. Prices are charged to you based on expected profits, in line with risks and rewards. Furthermore, lease companies must generally borrow money to purchase the equipment they then lease to you.
The way a lease company makes money is threefold:
- They charge interest rates on your lease.
- They get tax benefits because the equipment is financed.
- They sell the equipment once you return it (or they sell it to you) at the end of the lease.
Of course, looking into the details of a lease, there are probably 20 or so methods within that, which make this a profitable deal. It is your responsibility to make sure that those methods are legitimate, and that is a good point of comparison when finding a company to go with.
Of course, the way a lease company makes its money is not the only thing to look for. It is recommended that you start by going online and simply searching for companies in your area that lease this type of equipment. This should give you a pretty extensive list to work with, and you have to narrow it down from there. A starting point for that should be customer reviews.
Leases are quite lengthy contracts, so a business should have been in business for some time already, during which they will have had numerous customers or they wouldn’t be able to sustain themselves. Try to find out who those customers are and what their experiences have been with the organization. Do make sure these reviews are unbiased, for instance by looking at the Better Business Bureau (BBB).
This should help you to narrow down the list significantly. Contact the companies that you have left for free, no obligation quotations. This is where you need to decide which business offers the best value for money. That is not necessarily the cheapest price, but rather the one that provides you the best possible services for the most affordable price. Do make sure, therefore, that you also read the small print.