If you’re looking into equipment leasing, you may be familiar with the term “lease coordinator”. But what is a lease coordinator? And do you need one to lease equipment? What happens if you lease equipment without a lease coordinator? Why would I use a lease coordinator? This post answers these questions.
What is a lease coordinator?
A lease coordinator acts as your advocate and helps you navigate the vast world of equipment leasing.
Lease funding sources are plentiful, and each lender has their own preferences for deal size, industries, and equipment. Some work with start-up businesses while others don’t. Some offer flexible lease structures, while others have very specific requirements. Not every lender will be the best fit for the needs of your business.
Your lease coordinator will:
- Present your credit story to a potential lender in the best possible way
- Find the right lender for your financing needs
- Get you the best possible payment options
- Negotiate a lease structure that meets your unique needs
- Facilitate the documentation for you, the vendor, and the lender
Do I need a lease coordinator?
It is possible to get equipment lease financing without a lease coordinator, but there are clear advantages of working with one (see below), especially if any of the following apply to you:
- You currently have multiple pieces of equipment on a lease.
- You plan to buy multiple pieces of equipment in the future.
- Your business requires new equipment or upgrades on a regular basis (e.g. once a year or every two years).
- You rely on in-house financing available from the equipment vendor.
- You outsource your accounting and/or IT stuff (computer technology, website design, etc.).
What if I don’t use a lease coordinator?
As we’ve already mentioned, it is possible to get equipment lease financing without a lease coordinator. However, there are two serious dangers of “going it on your own” in the lease financing world:
- You may end up applying for lease financing at multiple lenders without understanding their nuances and preferences, resulting in wasted valuable time and a potentially negative impact on your credit score. (See #2.)
- Shopping for the best deal can have a negative impact on your credit score. When your credit rating or score is checked multiple times within a short period, it appears as a red flag to credit agencies because it gives the illusion that you’re desperate for money. See When Shopping for the Best Deal is a Bad Idea.
5 Benefits of a Lease Coordinator
Before you decide to find equipment financing on your own, consider these benefits of working with a lease coordinator.
1. Keep Track Effortlessly
If you have multiple leases, it’s easy to lose track of all the important details, such as
- When each lease began
- When each lease expires
- Early purchase option dates
- Multiple monthly payments coming out of your account
- Multiple lenders
- Which payment is for which piece of equipment
- Insurance requirements for each lease
The list goes on.
If your administrator or accountant keeps track of most of this in their head, then leaves your company, finding and organizing all of this information becomes a monumental task.
A lease coordinator is your direct contact for everything related to every lease. A simple phone call or email is all it takes to get answers for any question related to your leases.
2. Have a Financial Advocate
Let’s say you have a question or issue with a couple of your leases. You call one lender and speak with Jane. She doesn’t have the information you need, so she transfers you to a different department. You speak with John, who says he’ll get back to you. Then you call another lender about a different lease and speak with Sara. And so begins the process all over again.
Every time you speak to another person, you must start at the beginning and explain who you are and what’s going on. It’s impersonal, time-consuming, and frustrating.
Another common scenario when people lease equipment without a lease coordinator is that they lose track of their lease expiry dates and end up continuing to make payments on a piece of equipment that should already be bought and paid for. Lenders have no obligation to inform you of your lease expiry and it can roll into automatic renewal.
A lease coordinator is your advocate who contacts all lenders on your behalf and keeps things running smoothly. They’ll save you phone calls and paperwork, keep track of all your expiries and early purchase options, and take time to answer your questions. A good lease coordinator cares about each client personally and is committed to helping your business thrive.
3. Protect Your Financial Reputation
If you look for equipment financing on your own, you may start with one potential lender, give them the information they require, and wait for a lease approval. If you’re not satisfied or if you want to compare prices, you’ll contact another potential lender and go through that entire process again. You could do this endlessly.
Once again, this process is time-consuming. With each potential lender, you must explain your business, get a credit check, and present your situation in an effort to gain favour with the lender.
A lease coordinator knows your credit history, understands your business, and wants to help your business thrive. Their working relationship with many lenders allows them to anticipate which lenders will best meet your needs. Your lease coordinator knows the most effective way to present your business as a good investment for the lender, and will minimize the hits to your credit report.
4. Prevent Hidden Costs & Keep Your Options Open
Some vendors offer in-house financing options. While this can be convenient, there can also be hidden costs involved that will ultimately increase what you ultimately pay for your equipment. Vendors typically work with a single lender, so this minimizes your options and doesn’t allow for flexibility in pricing or structure.
A lease coordinator works with a diverse range of lenders to find you the best possible equipment lease deal. They can offer flexible terms and payment options, including stretch leases, skip payments (great for seasonal businesses like landscaping), and various other lease structures. You find the equipment, and your lease coordinator finds the money!
5. Diversify Risk
When you have multiple pieces of equipment or multiple leases, you can “hit a wall” with one lender. Lenders have a maximum amount they’re willing to provide a client.
Your lease coordinator can diversify your leasing portfolio by spreading your financing between various lenders. Each lender prefers specific types of assets and has a unique “appetite”. Because of the relationship your lease coordinator has with the lenders, they can connect you with the best match for each piece of equipment.
Choose the Best Lease Coordinator for You
If you’re looking for equipment lease financing, you already know the advantages of leasing. Now you also know the benefits of a lease coordinator. But it’s vital to the success of your business that you choose a lease coordinator you trust. See Choosing Your Financing Company for a helpful checklist of things to look for in choosing the lease coordinator that’s best for you.
At Lease 1 Financial, we share your values and offer unmatched value, personal and professional service, and deep expertise. For us, acting as your lease coordinator is personal. We’re committed to helping your business thrive. Contact us today to speak with a lease coordinator.