Right now there’s a lull in economic news to write about, and I’ve already recently reminded you about Section 179, so we don’t need to revisit that for at least a few days. And since the home repairs, my life has gotten a little boring (going on a cruise soon, though, so I’ll be back with details.) So let’s talk about general equipment financing today, and let me give you a few pointers in choosing the right equipment financing company.
When you are looking to finance equipment (or lease equipment), all equipment financing companies are not created equal. There are an awful lot of “flavor of the moments” out there, many that I wouldn’t trust to make me coffee, never mind finance equipment.
So here are a few things to consider when choosing an equipment financing company:
- Make sure your equipment financing company has been around for awhile. Really, you’d be surprised at the number of “in business since this morning” equipment financing companies are out there. My rule of the thumb? A decade in business. At least.
- Speed and ease of approval. Once you meet the above “in business for at least a decade” criteria, the next step is to make sure the equipment leasing company can get you fairly quick approval (let’s say, a day at most), and that they don’t need your first born to do such (although depending on your first-born’s demeanor last night, you may not mind putting little junior up for collateral.)
- Do they finance used equipment? This may not be that important for some, but I think it’s something that matters. Even if you have no interest in financing used equipment now, you may have interest in doing such later. Make sure your equipment financing company will at least consider this.
- How about “odd” things, like financing software? You’d be surprised at the number of equipment leasing companies that won’t lease software. Now, I’m not saying someone needs to write a lease on Microsoft Word, but financing an ERP system makes sense for many companies. And many equipment financing companies will happily write a software lease.
- I’m not going to say rates don’t matter, but it should be one of the last things you pay attention to. Any reputable equipment financing company will have competitive rates. I think the above is much more important than a tenth of a point on a rate.
That’s a fairly short list, but it does touch on a few things (and some that are “not so obvious”) that I think are important.
Have a great day!!