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What Is Vendor Leasing

“What Exactly Is A Vendor Leasing Program Anyway?”

A vendor leasing program is a prequalified financing referral that an equipment dealer or reseller can provide to their customers.

What I mean by a prequalified financing referral is that the equipment leasing company involved in a vendor program has assessed the assets being sold by the dealer or reseller and the amounts the assets are being sold for, and is open to providing financing to interested parties for the reviewed assets.

The leasing company (or companies as the case may be) has also qualified the dealer or reseller as an entity that is financially viable and capable of providing after sales service and product support to the end customer.

This last point is very important to any leasing company as they own the asset through a lease financing agreement, so if there are any issues with the equipment, they want to be able to contact the dealer or equipment reseller and get help to solve the problem.

A leasing company is also going to want to understand the basic credit profile of the average customer of the dealer as well as the number of transactions that occur each month where financing is involved, the average transaction size, and so on.

Once the dealer has been prequalified for a vendor leasing program, then the leasing company is prepared to accept applications for financing by the dealer or reseller’s customers.

The actual financing process is still based on approved credit of the customer and does not involve the equipment dealer or reseller unless the dealer is providing some form of recourse to the equipment leasing company to reduce their financial risk on any given deal.

Vendor Leasing Programs Are Designed To Speed Up The Equipment Lease Financing Process

So while a vendor financing program doesn’t actually provide financing directly by the vendor or dealer, it does streamline the process for applying for equipment lease financing through an equipment leasing company that is prepared to finance the assets in question, from the vendor selling the equipment.

A properly set up vendor program can get funding approved in a matter of hours, provided that the customer meets the lease funding criteria of the leasing company.

Without a ready source of financing to apply to, the customer is left to try and locate something themselves, which is going to take some time and could put the deal at risk.

And when a customer contacts an equipment leasing company, they likely won’t know right away if the assets they want to finance and/or the dealer they want to work with,  will be acceptable to the leasing company.

And while a well designed vendor leasing program can help close sales and increase profits, a poorly designed one can have the opposite effect on the business.

To find out more about the vendor leasing programs we can put together for you, please give us a call and we’ll get all your questions answered right away.

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Vendor Leasing Programs

Does Your Business Need To Vendor Leasing Program For Your Customer Equipment Purchases?

It can go by many names, but a vendor leasing program or vendor financing program is a pre-qualified financing opportunity for your customers who are going to require financing or want to utilize equipment lease financing to complete their purchase from you.

A vendor program basically means that the seller has gone to a leasing company or consultant, provided a detailed profile of their company, product offering, and profile of customer so that the leasing company can quickly assess and hopefully approve financing for their customers.

While a vendor or dealer leasing program does not guarantee a customer financing, it does greatly speed up the process of trying to secure financing by having a pre-qualified and highly relevant lender or leasing company receive an application for financing for equipment they are already comfortable with, provide by a vendor that they believe is financially stable and able to support customer sales transaction.

The best vendor financing or vendor leasing programs tend to be the ones that are run through equipment leasing specialist who have relationships with enough leasing companies to cover off the spectrum of credit that may occur in your customer base.

By sending customer deals through an equipment leasing specialist that has already pre-qualified the assets and vendor with a variety of lenders, the customer is more likely to be working with the right type of leasing company faster, increase the probability that financing can be put in place in time to close the sale.

Vendor financing program through equipment leasing companies is very common in North America, especially for vendors that have large product lines, ahigh volume of sales and customers requiring credit.

Get Vendor Equipment Leasing That Meets Your Business Needs

That being said, vendor financing can also be set up for a single product company.  But the key to any vendor financing program is going to be regular sales volume that makes it worth the leasing company’s time to provide more specialized attention to any particular vendor versus business applications received at large.

In order to set up a vendor financing program, the seller will likely have to have been in business for more than a year and have a track record of completed sales without any significant after sale issues.

Further, the more the item or items being sold can be considered to be a commodity, the more likely vendor financing can be arranged.  Failing that, the seller will have to be financially stable in order to deal with remarketing and repurchasing requests that the leasing company may have.

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