Your business lives in a competitive landscape; in addition to those external pressures, both your money and your time are scarce. Making decisions about new equipment and the financing depends on you having good information not only on the equipment, but on the organizations you will partner with for the financing. Leasing companies are a common partner in this decision – let’s explore what is important for YOUR business to choose the best partner for you.
Leasing companies play a crucial role in helping growing organizations acquire necessary tools and machinery without the burden of high upfront costs. Lease companies provide a range of financing options tailored to different industries and business needs. This blog guides business owners and decision-makers in the critical components for selecting the best partner. Industry data show that finance partners provide long term strategic advantages to a business when chosen wisely; by considering factors such as reputation, longevity in the market, targeted equipment options, pricing, and the critical post-sale customer support, businesses can make an informed choice that will positively impact operations and financial well-being.
Considerations for Choosing an Equipment Leasing Company
When evaluating a finance partner like an equipment leasing company, here are several key considerations to take into account.
- Range of equipment options: Consider the variety of financing options the company offers. Some companies are focused only on a specific target asset group – this means that if you have other needs, you may need a different lender relationship as well. Other companies have product lines specific to unique asset types, but also provide a broad suite of solutions that permit their clients to use them for many needs. A lease partner with a broader range of options simplifies the process of making decisions and bringing new equipment on board.
- Customizable leasing options: Flexibility is valuable when it comes to leasing equipment. The leasing company should offer customizable leasing options that align with your business requirements. This includes lease duration, payment schedules that work with your cash flow cycles, and the ability to upgrade or add equipment as your business grows. Customization ensures the leasing agreement is tailored to your needs and allows for greater operational resilience.
- Competitive pricing and rates: Cost is a significant consideration for any business, so it’s crucial to evaluate the whole financing solution being offered by the financing partner, and its impact on your business. Transparency is also important – do you know all the costs that your financing includes? Hidden costs or fees applied to your financing at the point of closing, or over the term of the agreement (key examples are annual renewal fees, monthly maintenance fees) greatly increase your cost of borrowing. Other things that impact your cost of borrowing can arise from disruptions in your credit history, changes in your buisness cash flow that can reduce your ability to negotiate pricing in the market. There are unique products out there (like Prime Capital’s unique PivotLease) that help you avoid long term cost escalations as a result of short term business disruptions. The bottom line; timing, transparency, and clarity on the financing terms relative to your needs, are vital in the decision-making process. Because finance is often bespoke (ie customized to your particular credit and business reality), the company you are evaluating may not necessarily advertise the lowest rates, but the best lenders will explain the product and terms clearly, and ensure that when everything is settled, you have the most competitive option. When selecting a lender, be sure to consider how they help you save time and whether they offer transparent and fair pricing. If it is hard to get to an answer, or there are red flags on the answers provided, make sure you evaluate other options.
- Customer service and support: Excellent customer service and support are vital when entering into a leasing agreement. In a recent survey of equipment borrowers across Canada, a top priority defined by customers was being able to quickly and reliably get support when they needed to make changes, solve problems, or modify their leases over the course of the agreement. A reliable financing company has a knowledgeable and responsive customer service team that promptly addresses questions and concerns. An experienced team not only understands the leasing process but also the challenges faced by your business over time and those are both key to delivering great post-sale support.
How Prime Capital excels in competitive transparent financing.
Prime Capital is a leading equipment leasing company in Edmonton, with a reputation for excelling on customer support, reliability, transparency, and competitive, flexible options. With over 20 years of client success stories in our portfolio, Prime Capital has established itself as a trusted partner for businesses across a broad range of industries. We offer an extensive range of creative equipment financing options, no matter what equipment will help your business grow. Whether you’re in construction, manufacturing, healthcare, or technology, there’s a solution perfect for you. And, our focus on both asset and business knowledge ensures that we can help you define the right answer to the challenge of adding new capacity, scale or automation.
Prime Capital also understands the importance of customization and flexibility in leasing agreements. We consult with you to tailor terms and options – allowing for seamless integration of leased equipment into your financial and operational workflows. Additionally, we offer transparent, competitive pricing and rates, ensuring that businesses can access top-quality equipment at affordable prices; with no surprises.
At Prime Capital, we take pride in our commitment to exceptional customer service and support. Our team of dedicated lease experts provides personalized assistance to guide you through the leasing process, and address any questions or concerns. Our focus on customer satisfaction sets Prime Capital apart as a leasing company that prioritizes the success and growth of our clients – your success is our business objective.
Researching Equipment Leasing Companies
When researching equipment leasing companies – taking the time to ask questions about your options before you sign, and how the company can support you during the term, is the best way to ensure your interests are being well served. You can evaluate whether the company and the options align with your equipment needs, budget, and growth plans, including leases with flexible terms, such as variable payment structures, pre payment options, or the ability to upgrade or add equipment as your business expands.
Asking questions also helps uncover any potential hidden costs or restrictions. Some companies may have additional fees, such as administrative charges or penalties for early termination or excessive wear and tear. Understanding what happens beyond the first payment aids you in making an accurate cost comparison between different finance and lease options.. A good discovery process can uncover restrictions on equipment usage or limitations that may impact your business operations, helping you avoid surprises or limitations down the line. It’s a long term relationship, so make sure it’s one that is going to work for you the entire term of the obligation.
You may know a lot about your business, but very little about finance. That’s ok – because a good lease company will answer any questions and provide support material on what you can expect, and put those commitments in writing as well. You are entitled to understand their reputation and prior customer experiences. Websites, testimonials and case studies, as well as independent reviews and ratings, help you gain insight into their prior customer experiences. You can also ask for references – finance partners are like any other relationship, and they should work uniquely for you and your business personality and priorities. This will help you evaluate their reliability and customer satisfaction levels. Understanding their reputation and customer experiences may predict the level of service and support you can expect from a particular leasing company.
Tenure is also important – what is the finance company’s track record? Finance, like every other market, changes constantly. Is your partner likely to be there for the long run? A solid well-seasoned finance business has been through many economic cycles – and they’re well capitalized and managed, meaning they have good business strategies themselves and will be there to support you throughout your relationship with them. If you choose correctly, your partner can be there over the years and will gain a detailed strategic understanding of your business model. This saves you time having to educate a new company on your business history and priorities, or use your time learning the language and policies of a new financing partner.
Asking the Right Questions
Once you have identified potential leasing companies, it’s crucial to ask the right questions during the evaluation process. Here are some key areas to focus on:
- Questions about the company’s experience and expertise.
Inquire about the company’s experience in the industry and their expertise in leasing the specific equipment your business needs. Understanding their knowledge and track record will give you confidence in their ability to meet your requirements.
- Questions about the credit and approval process.
Seek clarity on the leasing process, including application procedures, approval timelines, and documentation requirements. What are your obligations in the process, and what is the obligation of the finance company? What information is required, and have you disclosed everything that is needed to ensure you get the best possible outcome? How and when can vendors be paid, and can the vendor and the finance company collaborate effectively on that payment process? Understanding these steps will help you plan accordingly and ensure a smooth leasing experience.
- Questions about leasing options and rates.
Discuss the available leasing options, including lease duration, payment structures, and potential penalties or fees. How is pricing designed and what information could you provide that would help improve your risk pricing? This information will help you assess the affordability and flexibility of the leasing agreements.
- Questions about customer service and support.
Ask about the company’s approach to customer service, including how they handle support requests, equipment maintenance, and potential equipment upgrades. What happens if you have a disruption in your business or cash flow expectations? Who will take care of that? Understanding their commitment to ongoing support and customer satisfaction is vital for a long-term partnership, and one of the most important things contributing to satisfaction, according to lease customers surveyed across Canada in 2023.
Reviewing Leasing Agreements
There are a lot of stages in evaluating and executing a finance agreement. It is worth your time to invest sufficiently in each stage before finalizing an agreement. Once you sign a long term finance agreement (most leases average 3-5 years) you may have limited exit options and flexibility, so being certain about what you are committed to in advance, is much better than living with regret.
The last stage in the process is to thoroughly review the leasing agreement. Pay close attention to the following:
- Read and understand all the terms and conditions outlined in the leasing agreement. Look for details regarding lease duration, payment obligations, maintenance responsibilities, and potential penalties. Do they match your expectations and what was disclosed to you earlier in the quote stage? If not, do you understand what has changed?
- Ensure that you have a clear understanding of your rights and obligations as the lessee, especially if you are expecting to be able to exit a lease early, or make changes during the lease term. Some companies offer no flexibility – ie what you signed for is what you signed for and you may be obliged to 100% of the payments even if you exit the lease early. If possible, get options in writing for future reference. If you’re dealing with an intermediary, facilitator or broker agent, ensure you have those written options from the underwriter (ultimate lender who holds the lease). This will help you ensure continuity in the commitments even if the people involved in the original transaction change over time.
- Carefully review the agreement for any hidden fees, such as early termination fees, administrative charges, or excessive wear and tear penalties. Additionally, be aware of any restrictions on equipment usage or limitations that may affect your business operations. Identifying these potential pitfalls beforehand can save you from unpleasant surprises in the future.
- A favourable financing agreement should provide clarity, flexibility, and transparency. Look for agreements that offer clear terms, reasonable rates, and a focus on meeting your business goals. Ensure that the agreement aligns with your financial objectives and allows for potential growth or changes in equipment needs.
Choosing the right equipment leasing company is an important decision that can significantly impact your business’s growth. By considering factors such as reputation, equipment options, customization, pricing, and long-term customer service, you can make an informed choice that meets your specific needs. Thorough research, asking the right questions, and reviewing leasing agreements are essential steps in the decision-making process.
Prime Capital stands out as a leading equipment leasing company that excels in meeting these considerations. With their reputation for reliability, extensive range of equipment leasing options, customizable leasing terms, competitive pricing, and exceptional customer service, they are the ideal partner for businesses seeking equipment leasing solutions. When making your decision, carefully evaluate your options, and choose Prime Capital to unlock the benefits of a trusted and reliable leasing partner.
Contact Prime Capital today to discuss your equipment leasing needs and discover why they are the best choice for your business. Experience their expertise, flexibility, and commitment to your success.
