ss_blog_claim=bd50edc517cf0b7549fe6b5f63b6b5f8 The SLS Business Finance Blog: Why Equipment Dealers/Vendors Love Leasing

Tuesday, August 7, 2007

Why Equipment Dealers/Vendors Love Leasing

Many dealers/vendors of various types of equipment run into a problem when small businesses are their primary clientele. The problem is that those that need and use their equipment most often can't afford the 5k, 10k, 25k price tag up front to buy it. Financing the equipment themselves isn't an option for most dealers because they have to pay their suppliers for inventory and this would then put the dealer in the financing business, not the equipment business. They know equipment, they don't necessarily know financing.

Enter Equipment Leasing through a Commercial Finance Broker.

A dealer can work with an equipment leasing company (or multiple ones) to create a workable solution for everyone. Let's see how the 4 major players in this deal make out by way of a lease:

1) The Dealer: Gets full cash price with no discount. They don't have to worry about collections as they are paid and out of the deal. Its just like a cash deal to them. There is also potential for upselling as a nicer piece of equipment might only cost another 10 bucks a month. A win for the dealer.

2) The Client: Gets the equipment when they need it now with a favorable financing agreement to pay the equipment off over a 3-5 year period, much smaller more manageable payments. They make their payments to the Equipment Leasing Company and maintain a good relationship with the dealer for potential future purchases later. A win for the client.

3) The Equipment Leasing Company: Gets a new deal in their portfolio and collects the payments from the client. This is what they are in business to do and the client fits their portfolio requirements. A win for the equipment leasing company that funds the deal.

4) The Broker: Closes a deal that makes everyone happy and gets paid. A win for the broker.

A true win/win/win/win situation all the way around.

1 comment:

Adrian said...
This comment has been removed by a blog administrator.