THE LEASING PROCESS

(Do’s & Don’ts)

The lease process can be very simple and straightforward but many times the company (individual) complicates or even hinders the process with some misunderstanding or misguiding with this finance vehicle.

Once you have decided that equipment leasing is the finance vehicle of choice, fill out one application and send it in to the lease company you’ve decided on. Don’t fill out and send in multiple applications (shotgun!) as this will drop your personal credit score by many points as everyone is pulling your credit bureau, possibly increasing your rate of interest because of such a drop. Many banks have stepped lease rates with which criteria is based on credit score, the number and type of inquiries within a specific time period. Also most lease companies have the same pool of lenders (it’s a small world), some more than others so everyone will know your shopping. Fill out 1 application only with the appropriate information, initially no financial info required.

Buyer Beware, as unfortunately, many companies will quote you a payment, over a specified term based on what you’ve discussed on the phone and then tell you that you need to send in your money to lock in your rate or approval. You send in your money, fill out your application after the fact, only to find that your payment is substantially higher than quoted, and if you back out now they will keep your deposit as fees for securing the so-called financing. An ethical lease company will process your application, along with the necessary documentation that is sometimes required to secure such approval, a better rate, or a turndown with no upfront money. On approval they will then discuss the appropriate rates, terms available and buyout options to you so there is no ambiguity as to what you’re getting into.

Generally, the turnaround time is 24-48 hours, depending on what the various financial credit references report on your company. Credit of the principles, time in business and bank rating are pertinent considerations for lease financing. For example if XYZ Company in business 5 years, owner or president has good credit, applies for $35,000 for pertinent equipment it would probably take 2 hours. On the other hand, you’re a new business (less than 2 years) need $30, 000 for pertinent equipment, we may need a personal financial statement and last years personal/business IRS returns which, may take 48 hours. The lease process does not take weeks or months, but hours or days. If it’s longer than this without valid reasons, or your not getting a timely response from your agent than find a new company. Remember time is money; you need that equipment now to produce profits!

Beware of a  pre-approval, as many find their pre-approval was just hype to get them in the door. Worse still, some have gone and made commitments, deposits in the startup or expansion of their business only to find the approval letter in hand was bogus! Would you extend credit to someone you didn’t know based on what they told you over the phone!

At First Financial Funding we match lenders to your financial criteria, negotiate the best rate and terms you need to acquire the necessary equipment. This is as pertinent as the right mortgage in buying a home. Some lenders will not do startup businesses, titled equipment, cautionary industries with high risk, software only, certain states, credit challenged. What differentiates us from the rest is we don’t just take an application, but put together a complete package to increase the ratio of success whereas, many just throw it up there to see if it sticks or not, then move on to someone else. We work hard to put your deals together as your success and growth is ours.

Email

www.first-financial-funding.com