Things that you need to know about equipment vendor finance

 Things that you need to know about equipment vendor finance

Financing is an aspect that many equipment vendors would not love to be bothered with. They can quickly figure out that the customers who can afford will buy the equipment, and those who are not ready will not.

There are customers who are on a tight budget and are unable to afford the equipment and are never going to buy. This does not mean that their opportunities stall there. Instead of purchasing the equipment, the customers are leasing them. You can also be losing quite a bit of your business to your competitors that do offer the leasing programs if you do not have a leasing program, and this calls in for equipment vendor finance.

Equipment Leasing vs. Buying

It has been noted that only 22% of businesses usually buy their equipment outright while the rest often finance the purchase according to the recent surveys. It is through the loans that less than 50% of that equipment financing is done. Through the leasing programs, most of the equipment is acquired.

Equipment leasing offers some substantial benefits over the purchase, such as the tax benefits and easy upgrades for the small business. It is often the only option for cash that is strapped and credits weak companies as it requires less capital upfront.

It is a much broader customer base for the vendor. The companies you have never considered earlier on, you can offer your products to them. It often means more income over the long run rather than selling a piece of equipment outright additionally. Leasing can be approved at a lower level of the organization as it is an operating expense and not a capital expense. On the deal, you would be having a quick turnaround time.

Leasing Brokers do the Dirty Work

Equipment leasing is not something that you have experienced is if you are like the typical vendor. You probably do not have anyone on staff that is well-versed in the details of financing as you know how to design and manufacture the product. You may even be creating a new department along with all the bureaucratic headaches that come along such restructuring, as this means hiring a new person.

It would help if you went through a broker instead of doing it yourself. Matching you to the right customer, checking the customer credit, finding the funding sources, and setting up the lease agreements as brokers handle all the picky details. This way, you can easily focus on what you do the best without having your efforts being diluted.

Leasing Income Means Regular Cash Flow

Leasing lets customers upgrade equipment more frequently, and that is good for your business as well. Rather than waiting for the old equipment to die, you can sign customers to new leases on updated, and usually more expensive, equipment and increase your cash flow.

It is quite suitable for your business with leasing as it allows customers to upgrade the equipment more frequently. You can quickly sign customers to new leases on updated and usually more expensive equipment that increases the cash flow instead of waiting for the old equipment to die.

There is an array of potential new customers along with predictable income once you implement equipment vendor finance program. The program is going to have pretty little impact on your actual day-to-day operation except for the increased sales opportunities doing through a broker. There is no reason for any equipment vendor not to offer a financing program to their customers as leasing is an increasingly popular option.

100% Financing

Installation, freight, training, and licensing are all included in the vendor equipment financing programs, and they are all included within the financed amounts. For your clients, this would help to reduce initial out-of-pocket costs further.

Private Label Financing

You can now have the look and feel of a captive vendor finance division without the work through our private label vendor financing program. With your company logo and color scheme, the marketing department is available to create custom applications and other materials. You can also find the custom logo equipment lease calculators and apps as well. 

Industry Expertise

It is essential when you have a vendor equipment leasing company on your side that has an excellent understanding of your industry. Customers usually get the most flexible equipment financing options that one can go ahead with.

Minimal Cash Upfront

When it comes to cash, it will always be on the top. The customers can make better use of their cash instead of tying it up in equipment purchase that proves to be costly. At the end of the year, the vendor financing programs usually require little money in advance and your customers can enjoy immediate use of the equipment as well as the tax.

Easier Selling

You are usually selling a monthly payment that is often far lower than what the equipment will be generating in profits instead of selling the total cost of the equipment/project with a vendor equipment financing program. From the use of the equipment being acquired, this would allow the customer to justify the more significant purchases that are paid for overtime.

Elyse Sanford