10 Questions to Ask When Selecting an Equipment Leasing
When businesses need to obtain expensive equipment, but either don’t have the capital to purchase it outright or expect that its value won’t last more than a few years, often have the option of equipment leasing. If your company is considering leasing equipment or machinery, here are some topics you should discuss with your potential leasing agent before signing a contract:
1. Payment Plans
In addition to fixed monthly payments, there may be alternatives like fluctuating payments that accommodate seasonal sales trends or payments that increase as revenue builds due to the leased equipment.
2. Price Negotiation
As with any major purchase, an equipment leasing company should be willing to negotiate with you on price, term length or additional services.
3. Equipment Buyouts
Often, leases for heavy machinery and equipment that you intend to keep for many years have an option for purchase at the end of the lease term.
4. Tax Benefits
Equipment lease payments are generally deductible business expenses on tax returns. The financial advantages, like tax deductions, should be discussed with your CPA or financial advisor before leasing or purchasing.
5. Maintenance and Service
Find out if your lease will include maintenance or operating supplies and get details like a service timetable, response readiness and a schedule of additional costs.
6. Equipment Knowledge
If your lease provides for the type of services listed above, it is crucial to make sure your leasing company is familiar with the equipment you will be using.
7. Customer Service
Business and office equipment are often tailored to suit specific needs, so a leasing company that will work with you to select the best choice for your company could be an advantage if you’re unfamiliar with the products.
8. Licenses
As with your customers, you should verify any company with whom you enter into a business agreement. Government regulatory agencies can confirm that a leasing company’s licenses are valid.
9. Referrals
Word-of-mouth can be a great way to find a reputable equipment leasing company, and an agent should be happy to provide a list of satisfied customers that can give you their recommendation.
10. Application Requirements
Before diving too deep into the negotiation process, ask for a list of eligibility and application requirements to make sure your company can qualify for the lease.
Making the right choice when selecting a leasing agent for equipment or machinery can have a long-lasting effect on your satisfaction with the costs and customer service factors involved. Make a point to ask these questions and follow up until you feel you have all the answers you need to make an informed decision on equipment leasing.
