Important Questions to Ask an Equipment Financing Company

Equipment leasing is a strategic financial alternative that businesses should consider irrespective of their financial standing. It becomes an even more appealing option when it comes to the current environment where managing cash flow, upholding capital and obtaining flexible financial solutions are even more crucial as businesses ride through the storm. Negative economic uncertainty and declining forecasts are some major difficulties to grow a business, but for the businesses that want to stay cutthroat, specifically during a downward economy, it is essential to be strategic about how you acquire your equipment. Lease financing is a feasible option to acquire equipment and it is crucial to know its pros and cons so that you can negotiate what’s best for your business. We have brought to you some questions that are important to ask equipment leasing finance companies.

1.How Will We Be Using The Equipment?

Establish how your business will use the equipment and the duration for which it will be required. This will help you figure out the appropriate level of investment for a lease. To help determine if leasing is a beneficial financing option, you should also perform a simple cost/benefit analysis that evaluates the periodic leasing payment to the revenue you expect to generate by using the equipment.

2.How Well Does the Equipment Leasing Finance Company Professionals Understand My Business?

It is important to work with someone who understands your market irrespective of the service you are seeking. This becomes even more essential when it comes to leasing. The understanding of the equipment finance lenders about the inconsistency of the market and other factors that affect your business can have an immense impact on the successful outcome and desirability of a lease contract. It is also crucial for the heavy equipment financing company to analyze your business’ cash flow requirements. Apart from that, the equipment finance lenders can also be considered consultants, offering additional advantages through lifecycle asset management solutions.

3.What Are the Total Lease Costs and Payments?

Asking this specific question remove any chance of misunderstanding in the future about the number of payments, any additional costs related to insurances, total monthly payment due, taxes and other charges. Furthermore, make sure to ask if there are any additional costs related to the lease that may occur during the period of lease terms which include late payment fees and other surcharges.

4.What Happens If I Want to End the Lease Early or Change Terms?

If you want to discontinue a lease earlier than originally contracted, it is crucial to keep in mind the terms of your contract. A lease is an agreement between two or more parties generating obligations for those parties, therefore changes such as to term or duration requested after signing and not set forth in the original agreement could lead to additional charges or payments.

5.What Is My Responsibility If the Equipment Is Destroyed or Damaged?

It is your responsibility to know the liability of your company for the equipment that you are leasing before signing a lease contract. Asking this question will help you establish whether you must pay for or replace damaged or lost pieces of equipment.

6.Do I Have Any Other Obligations for The Equipment?

Determine if your equipment leasing finance company will assume the costs for the insurance, maintenance and taxes of the equipment. Make sure that these terms and conditions are clear and mentioned in your contract, and revise these provisions with your heavy equipment financing company representative. Also, see if you prefer an option where the equipment leasing finance company is supposed to take care of maintenance, installation, tracking, asset management and other services or if you are accountable for these services.

The more questions you ask, the more beneficial it is to you as you will have the information to make an informed decision about lease financing. Asking the right questions will put you in a stronger position when you acquire equipment so that you are able to concentrate on making strategic use of the equipment at a time when your business demands every benefit possible to stay competitive and afloat. If you are planning for heavy equipment financing in Canada, do not miss out on Vendor Lender. They have been catering to startups and businesses for more than 30 years. The experts and professionals at Vendor Lender will make heavy equipment financing a cakewalk for you.