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   ARTICLE   |   From Scotsman Guide Commercial Edition   |   November 2006

Distinguish Yourself with Lease Financing

Differentiating your product line can help you stand out in a competitive market

There is a blitz upon the commercial mortgage world. Residential mortgage brokers are charging into the commercial lending world like a stampede. And for good reason: There is much opportunity to be had.

But if you’re not careful, your services soon could be a mere commodity. Now is the time to differentiate yourself from other brokers — to establish yourself as a stallion among the pack mules.

This is your chance to build a competitive advantage for your firm by expanding your product line to include equipment-lease financing. Do this today and you may reap the rewards of business longevity when the dust of the commercial stampede settles.

Offering lease financing as an adjunct or even a second core business-offering to your clients can be smart and profitable if you align yourself with a great equipment-leasing partner. By doing so, you can engage in more-consultative conversations with your business clients that center around their entire business-financing strategy. This can result in better, longer-lasting customer relationships.

You might be wondering if your customers would be interested in equipment-lease-financing services. Well, many already are using them. Eighty percent of businesses lease some or all of their equipment, according to the Leasing Institute of America.

This means your commercial customers are already getting this financing from someone else. It might be time to take your customers back. After all, people would rather do business with one trusted adviser, shop or firm than with many.

In addition, equipment-lease financing is already a part of many of your deals. By offering it, you ultimately might be able to do more commercial loans.

Equipment leasing can offer significant benefits to your business-owner clients. They include the following:

  • Dramatically reducing acquisition costs: Leasing generally offers lower payment options, tax or accelerated depreciation benefits, and options to put no money down. Your customers can put these upfront savings to work by investing them back into the business or into interest-bearing accounts.
  • Strengthening the balance sheet: Payments associated with certain leases are treated as expenses and true off-balance-sheet financing. This can help preserve and strengthen your clients’ financial ratios.
  • Offering flexible payment options: Leasing companies can offer deferred- or seasonal-payment options. This is especially helpful to businesses in industries that ebb and flow.
  • Avoiding obsolescence: Cutting-edge equipment and technology becomes obsolete rapidly. For companies to keep up with the pace of technology in the 21st century, they must regular upgrade core technologies. Leasing gives your customers options to trade in equipment and/or to build upgrades into the lease.

Once you’ve identified the candidate with the best answers to the questions above, take some time to dig. Next comes your due-diligence process in selecting a leasing partner. Consider the following:

  • Look for a reputable firm with several years in business and an easy-to-use Web interface. 
  • Seek a firm with a full-spectrum credit window to help you fund your business, in addition to numerous financing options. 
  • Check the Better Business Bureau to ensure the leasing company is in good standing. 
  • Note if the company is affiliated with a major equipment-leasing association, such as the Equipment Leasing Association of America or the United Association of Equipment Lessors. Most respectable ones are.
  • If possible, look for a firm that operates as a direct lessor and as an established lease syndicator. These companies often can obtain good pricing, have diverse product offerings and have processes to handle many transactions.
  • Expect to have a dedicated point of contact assigned to you or your customer internally.
  • Make sure the company has substantial origination volume. This means buying power and better access to capital and leverage to drive niche products from wholesalers in the secondary markets.

If you’ve made the right choice, you should experience excellent customer service, immediate response to inquiries and equipment vendors that are paid quickly and without hassle.

•  •  •

Setting up a great lease-financing program for your customers is not difficult. Once you’ve aligned yourself with the firm that best suits your needs, you’ll get the hang of the business quickly.

Your customers will lease with or without you. So it’s time to distinguish yourself.


 


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