Home Advertise Contact Blog Advertiser Login RSS
Newsletter Signup

Buy A Business Opportunity of Franchise
Home-Based Businesses
Choosing a Business Opportunity Growth and Profit Marketing and Sales
Plans and Goals Running Your Own Business Start-Up
Working From Home Entrepreneur Exchange Feature Articles
Opportunity Community Opportunity Focus In The News

Female celebrities are breaking the stereotypes of Hollywood and diving into the world of business. Check out how these women are using their fame, fortune, and power to start their own companies. From media production to makeup, these Top Female Celebrity Business Owners are doing it all!

As...

With only a few weeks lefts in 2017, it’s time to get organized now! The holidays are around the corner and you don’t want to be scrambling at the end of the year. Use these Small Business Organization and Tax Tips to End 2017 to help you keep the end of the year stress to a minimum.

Happy...

Entrepreneur Natural Disaster Tips - Top 50 Things for Business Survival

Hurricane’s Harvey and Irma have taken a toll on many home-based, work-from-home,...

Sponsors

STARSCAPES®
Imagine making up to $500 to $1,800 a day! Call or click now see how you can get your business for FREE! (602) 679-0257
Promotional Products Home Business
Run Your Own Business. Be Your Own Boss. Earn Great Profit Potential. Start At A Low Cost. Try It For Free! Learn More.
Residual Income Business Opportunities
Residual Income is the way that you work once and get paid multiple times—sounds great!... Read On
Top 7 Reasons to Consider a CMS
The internet loves obscure abbreviations. You can skip over most of them, but not CMS. What is CMS? read on...
The Ideal Length of Everything Online, Including Social Media Posts
When one of your busiest marketing channels limits you to 140 characters, you know that the internet sets its own rules.
Low Cost Business Opportunities to Own
Are your right for a Low Cost Business Opportunities to Own? The desire to own your own business... Read On
Why Advertise Your Business Opportunity?
Over the years we have been fortunate enough to receive quite a few testimonials. In fact, ... read on
The Top 10 Reasons to Buy a Business Opportunity or Franchise
Starting your own small business is part of the American Dream, right up there with owning your own home. Read On
7 Keys to Leading Highly Effective Sales Conversations
Most people's sales conversations could be better. Not a little better, significantly better. Read On
National Property Inspections
Flexible work schedule, no experience needed, and complete training and support available!
How Many Leads Does It Take To Close A Sale?
This Featured Article is live on our blog and I know could be very insightful for connectivity and ROI.
Top 50 Home-Based Business Ideas
Home-Based Business ownership can be the most rewarding endeavor you will ever undertake. The new year... Read On
I Want To Buy a Business Opportunity or Franchise
Who are the types of people who buy a business opportunity or small franchise? According to people in... Read on
Copying & Publishing Business Opportunities
Today creativity abounds in the printing and publishing space with more unique business solutions than ever imaginable.
 
Resource Center > Article
Equipment Financing 101: A Quick Guide to Smart Leasing
Share this Article:

In tough and uncertain economic times, many companies will often turn to leasing over buying to acquire the assets their growing company needs.  I’d like to take this opportunity to offer a few insights on the basics of equipment financing, and enlighten you about the potential pitfalls of leasing so you can avoid them and make the smartest leasing decision possible for your growing business.

What you don’t know can cost you a pretty penny, so read on my friends...

Did you know that four out of five U.S. companies lease equipment each year, totaling more than $200 billion worth of goods?  According to the Equipment Leasing Association (ELA at www.elfaonline.org), U.S. businesses lease everything from office furniture to computers and even airplanes!  The sad part is that many who lease don't know the ins and outs of leasing well enough to negotiate an honest deal.  By focusing on a few key aspects of the lease transaction, you can save a bundle on your next lease and eliminate problems.

Before You Get Started

A common mistake many people make is not knowing their business’s credit score or their own personal score, before beginning the leasing process.

A bad credit score can cost you big.  If you don’t know your personal credit score, go to www.freecreditscore.com today before taking the next step.  You can also search your firm’s credit score in some cases by going to Dunn & Bradstreet (www.dnb.com), if you have a file with them.

Bottom line: If loans are part of the mix, knowing your personal or business credit profile is a critical first step.  Having a higher credit score in almost all cases can lower your financing costs and increase your chances of securing financing lease or a loan.  If you have a lower credit score and/or low company rating and can afford a little time, a number of companies offer solutions to increase your score or rating before you try to obtain financing.

Choose the Right Leasing Partner for Your Needs

The starting point in saving money on any lease should always be choosing the best leasing company available that can meet your needs.  By choosing the best leasing partner, you can avoid slow approvals and the potential inability of the lessor to deliver the goods you need on time, which could result in losses that can really add up.  In addition, a reputable leasing agent is less like to bury hidden fees in the fine print.  When looking for just the right leasing company, it’s also critical to understand that a badly designed lease transaction can really cost you big.

Here’s what you should ask/look for:


  • Get a list from the lessor of recently completed leases with references that are more than six months old.

  • Ask the lessor for their financial information and get background information on their key lease managers.

  • Look for experience and knowledge; how long have they been in business?

  • Research the Better Business Bureau www.bbb.org or Dunn & Bradstreet www.dnb.com for their ratings.

  • Ask for a list of their key funding sources.


Once you have obtained all of this information, take some time to digest it and then follow up with all contacts provided by the lessor before taking the next steps.

Choose the Right Lease For Your Needs

You can reap huge cost savings by signing the right lease for the equipment you want.  Because lease pricing is market-driven, I suggest you get at least four lease bids and consider the following:


  • Review and compare each company’s lease flexibility

  • Compare their equipment obsolescence terms

  • Consider your anticipated period of equipment usage


Look for a lease that has desirable end-of-lease options, with the longest notice of end-period possible, as well as the ability to relocate equipment by notifying the lessor.  Lastly, you need to examine the right to terminate the lease early without penalty or plan to negotiate the lowest penalty that you possibly can.

Additional Topics to Consider

The ‘Bargain Purchase Option’ - So long as there is an assumption that you plan to eventually purchase the leased equipment, or an upgraded version on an agreed option date, the Bargain Purchase Option allows the lessee to eventually purchase leased equipment at a price below expected fair market value.  Having an upgrade option will allow you or your firm to trade in your existing leased equipment for newer, more advanced equipment during the lease term.

Also, make sure to ask for ‘Fair Market Value Caps.” This means that the rental and purchase options that are built into your agreement allow the lessee to either continue leasing the equipment or to buy the equipment at the then fair-market value at the end of the lease term.

Make sure you keep your equipment properly maintained and that your employees know you don’t own the equipment… any damage or overuse can cost you down the road in penalties from the lessor, per the terms of your agreement.  Even though you might not anticipate returning the equipment you’ve leased, if you have to at the last minute and the equipment is in bad shape, the penalties can be truly costly.  This is especially true if you return before the end of the term of your agreement.

In conclusion, leasing can often get you the equipment you need and, in most cases, allow your company to remain more financially solvent than it would if you had to buy outright.  However, if you don’t do your homework, you can get burned.  Remember, due diligence is always a good investment of your time…now get to work!

 

Related Blog Posts

Buying a computer for your business is a big decision. Don’t take it lightly! To help, we’re sharing our tips to Choosing the Best Business Computer.

If you’re thinking about buying a computer for your business, please read this, PLEASE! Buying a computer is one of the most important business...

Feeling overwhelmed with being a mom and an entrepreneur? We got you covered with our Success Advice for Mom Entrepreneurs!

Being a mom is a full-time job itself. It is no secret that children require a lot of attention. This can be tough if you are trying to start or run your business from...
30 Oct 17 Posted by: admin
in Running Your Own Business

Secure the Right Domain for Your New Digital Business - Every digital business starts with one thing in common: a domain name. Without a domain name, you do not have an address for your business where customers can find you.  It’s like having a business without having a physical address. How can...

With millions of apps to choose, what are the go-to apps for entrepreneurs? Check out our picks for the Top 10 Apps for Entrepreneurs in 2017!

Let’s face it, our smartphones rarely stray from our sides. We’re all tied to our phones, whether it be to text, call, or email. What are we using our...

Starting a Business? The Best Tools for Business Owners. To help you save your time searching the internet trying to decide what option to pick, we’ve compiled the best tools for business owners available on the market.

With modern technology, everyone is always raving about a new app or website....
 
   

I had the pleasure of chatting with Shawn Pigg, CEO of Hotels Etc. for BusinessOpportunity.com's Podcast series that will be released very soon on our new Digital Platform.  Here is the transcript from that call for our regular RSS feed subscribers who get all of our posts first.

If you would...
Read More


Premium Sponsor