Having a “financing department” might not seem like a necessary part of running a small business. How do you know when it’s time to outsource your financing needs?
Do You Need To Outsource Your Financing?
Do you currently have multiple pieces of equipment on a lease?
Will you be buying multiple pieces of equipment in the future?
Does your business require new equipment or upgrades on a fairly regular basis (once a year, or every two years, for example)?
Do you rely on the in-house financing available at the place you buy your equipment?
Do you outsource your accounting? Your IT stuff (computer technology, website design, etc.)?
If you answered “yes” to any of those questions, it might be time to think about outsourcing your financing. Here are 5 of the benefits of having an outsourced financing department.
1. It’s A Lot To Keep Track Of
If you have multiple leases, it’s very easy to lose track of all the important details:
- when each lease began
- when each lease expires
- when you have an early purchase option coming up
- multiple monthly payments coming out of your account
- various funders (underwriters)
- which payment is for which piece of equipment
- the insurance that is required on each piece of equipment
- making sure the insurance is renewed each year
The list goes on.
What happens if your admin or accounting person leaves your company and that information goes with them? (Some people are actually capable of keeping information like this entirely in their own heads!)
Using Lease 1 Financial as your private leasing department frees you up from keeping track of all of those things. We are your direct contact for everything related to your lease. One simple phone call or email is all it takes to:
- ask a question about your lease
- inquire about a particular payment
- ask about buying out the lease
- take advantage of the early purchase option
We take care of the rest.
2. You Need A Financial Advocate
Imagine having a question or an issue with one or more of your leases. You call the funding company and speak with Janice. She doesn’t have the information you require, so she transfers you to a different department. You speak with Tom. Then you need to call another funder and speak with Kelly. Every time, you have to explain who you are and what’s going on. It’s impersonal and can be very time-consuming.
Think of Lease 1 Financial as your advocate, working behind the scenes to keep everything running smoothly. We are your go-between, contacting the funders on your behalf. We can save you phone calls and paperwork, and we like to take the time to answer your questions. We care about our clients and we are committed to helping your business thrive.
One very specific example of why this matters is overpaying on a lease. We have had clients who, prior to using our services, lost track of when their lease expired. Unbeknownst to them, lease payments continued coming out of their account up to two years past the lease expiry date! Funders have no obligation to inform you of leases expiring and can roll it into automatic renewal. At Lease 1 Financial, we keep track of all of our clients’ lease expiry dates and early purchase option dates, and we contact you ahead of time to prevent renewal overpayment.
With Lease 1 Financial, you’re not just another number.
3. Protect Your “Financial Reputation”
Another scenario is looking for financing on a piece of equipment. You could call one funder, give them all of the information they require, and wait for a lease approval from them. If you’re not satisfied or if you want to compare prices, you can contact another funding company and go through that whole process again. You could do this endlessly in an effort to get the best deal. Each time, with each funder, you must explain your business, get a credit check, and present your situation in an effort to obtain favour with a company willing to offer you a financing option.
(See also: When Shopping For The Best Deal Is A Bad Idea)
With Lease 1 Financial as your own “outsourced financing department”, we know your credit history, we understand your business, and we want to help your business thrive. We have an excellent working relationship with many different funders. With our experience, we have a very good idea of which funder(s) will best meet your needs, as well as the most effective way to present your business as a good investment for a funder. We can minimize the hits to your credit report and we can advocate for you with one of our many funders based on your specific needs.
4. Prevent Hidden Costs & Keep Your Options Open
Some vendors offer in-house financing options. While this can be a convenient option, there can be various hidden costs involved that increase the cost to you. A vendor will likely have only one major funding company that they work with. This will minimize your options and doesn’t allow for a lot of flexibility with pricing or the structure of your lease.
When you use Lease 1 Financial as your financing source, we can work with the vendors as well as our diverse range of funders to find you the best possible equipment lease financing deal. We can offer flexible terms and payment options, including stretch leases, skip payments (good for seasonal businesses like landscaping, for example), and various other lease structures.
You find the equipment, we find the money!
5. Diversify Risk
When you have multiple pieces of equipment, or multiple leases, you can “hit a wall” with one funder. Funders have a maximum amount they are willing to provide to your company. Using our services allows us to diversify your leasing portfolio, spreading your financing between various funders. Different funders like different types of assets and have different “appetites”. Because of our relationships with our funders, we can connect you with the best match for each deal.
Choose the Finance Company That’s Right For You
There are many advantages to lease financing for your business. Add the benefits of having your own outsourced financing department.
We strongly believe it’s important for you to choose a financing company that you trust and that meets the needs of your business. See also: Choosing Your Financing Company for a helpful checklist of things to look for in choosing the finance company that’s right for you.
Lease 1 Financial is committed to working as your advocate. We offer unmatched value, personal and professional service, deep expertise, and shared values. We’d love the opportunity to serve you. Contact us today to find out more about how we can help your business thrive.