And sometimes, they need it without warning.

The obvious “without warning” need is a machine breaking down, or some kind of accident. But let’s leave those out, as they are pretty obvious. Let’s talk about some other less-obvious instances that could bring on the need for more equipment very quickly.

I’ve known customers who were happily chugging along, when one day, a sales rep calls in with a new account that changes everything. All of a sudden the volume goes way up, and a company that made 200 widgets a day all of a sudden needs to make 300. There’s little upside to turning away this new business, so the company needs more equipment fast. 

Here’s another instance I remember: there was a local waste hauler in a county where new people were elected, and very quickly, they passed new recycling laws. All of a sudden, the hauler needed new bins for people’s homes, and new sorting machinery would help a lot too. Rumor quickly became law, and everything was turned upside down in a matter of days. 

Both of these types of changes mentioned can be planned for if seen coming, but sometimes they hit like a bolt of lightning. One new customer who’s very eager to get started, or one election with new, engaged people taking power, and everything can change for a company. So they need financial flexibility, and they need to be able to pick up the phone (or go online) and get the equipment financing they need quickly.

And they can’t do that if they are bogged down with restrictions from a previous bank loan.

In the end, it’s a very empowering feeling to not only have financial flexibility, but to also know you can get fast equipment financing on demand (almost literally). Being unfettered by restrictions does this. So choose your equipment financing partner wisely.

When I say flexibility, I am talking about a few things. To most people, the obvious things are “financial” in nature – things like finance term, rate, down payment options, payoff at the end of the equipment lease, etc. A solid equipment financing partner should be able to do almost any kind of (reasonable) finance deal that the buyer wishes – if the buyer wants a five year term, it should happen. If they want a seven year term, that (generally) shouldn’t be an issue.

I say things like “reasonable” and “generally” in the preceding because let’s face it; given the choice, we’d all like zero percent spread out over 20 years! But then Fletch starves (and Mrs. Fletch runs off with the paperboy, who’s making way more than me under that zero percent scenario.)

But anyway, financials aside, “flexibility” means a few other things. Like financing “odd” things, such as software. Believe it or not, there are many equipment financing firms that will not finance (or lease) software. But let’s face it – software increasingly is becoming more and more ingrained into what we do. In fact, many businesses simply cannot be run without it – it’s as every bit as important as a machine. Thus, your equipment financing partner should be able/willing to finance software, and any other reasonable product. Even if you don’t sell software, this type of “proven” flexibility means they will likely be able to help you next year when you roll out “the wonder widget” and are looking to offer financing.

Here’s another thing – how about financing used equipment? Some equipment finance companies will, and some won’t. But in the end, your equipment financing partner should be willing to finance good condition used equipment. Now again, you might be saying “big deal – we don’t offer used equipment”, and that may be true… for now. But could that change? Perhaps. But in the end, it’s better to have a partner who’s willing to do these things NOW than get stuck with someone who won’t play ball when you roll out something new. 

So let’s say you want to get on board, and choose an equipment financing partner (or perhaps replace the one you have) – what should you look for? What separates a good equipment finance partner from one that could actually hurt your business? In Fletch’s opinion, here are a few things to look for:

• Longevity / Time in business – As with any financial partner, you want to make sure your equipment financing partner has been through economic ups and downs, and has been around for at least a decade (if not more.)

• Competitive rates – This is an obvious one, but their rates should at least be competitive. They need not be the absolute lowest, but at least they should be in the same ballpark.

• Flexibility – Make sure they can write all kinds of equipment financing loans and equipment leases. Plenty of terms, down payment options, etc. The easier they can make things for your customer, the better you look.

• Equipment leasing – will they write equipment leases? Hey, some won’t, and it will matter to many of your customers.

• Ease of application / approval – This is a biggie. If your customer can fill out a quick online form for equipment financing / equipment leasing application, and then get a fast approval, that’s a HUGE plus in your favor. Trust me, there are equipment financing companies out there that that want reams of paper / financial statements before they will even consider an application. And there are others (like mine) that just have a quick online form. This isn’t self-serving by me, mind you – it’s just fact. Easier is better when it comes to a financing application.

Obviously, there’s more to picking an equipment financing partner than the above, but I do feel the above list should be a starting point for anyone looking to partner with an equipment financing provider.