Choosing The Right Equipment Financing Partner

You are a business selling expensive equipment. You don’t want to offer financing yourself. But your customers need a source of funding so they can afford to buy from you. You can either tell them to find their own money, or you can team up with a company that arranges financing.

The trick is to find the right equipment financing partner for your business. You want to be in business with a reliable, reputable company that offers good rates and excellent service to your customers. That protects your reputation and keeps people buying from you.

Here is a look at what to keep in mind when choosing the right equipment financing partner.

Use Due Diligence

The more information you have about prospective equipment leasing partners, the safer you are. Start by researching the basics. Check for problems with the Better Business Bureau and Manta. Be sure to Google “name of the leasing company + Ripoff Report.” You might be surprised at the results.

Look for Experience

Aim for a company that has been in business at least five years. Ask the company for a reference sheet.

Where Do They Get Their Funds?

Ash about their funding sources. If they say they are a direct lender, be aware that they will turn down many of your customers for financing. That’s simply because they are using their own money and need to be careful.

It might be more helpful to find a financing partner who works with banks or equity partners. Be sure to investigate these partners. To be safe, you want a financing partner that works only with other ethical funding partners.

Interview Their Customers

Ask for the names of businesses that have used them as financing partners. Also ask for the names of customers they have funded. Call and interview a number of these people. Ask about their experience and if they would work with the financing company again.

How does the financing company communicate with the customer? Are rates and terms clear? Is their communication style transparent, with everything spelled out? Is it easy to view and get copies of documents? Is there any resistance to open communication? If so, that’s a big red flag.

Good financing makes it easier for people to buy from you. But your financing company must be reputable, open and easy to work with. To find the best partner, take plenty of time to research and ask questions.

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