Vendor Lease Programs – Lease Company Versus
Equipment Leasing Broker

What is the basis difference between a vendor lease program for customer equipment purchases set up and administered by a lease company versus a lease broker?

This is a very common question as these are really the only to avenues available to a business to set up a vendor lease program for their customers.

First of all, a lease company is one company with one set of leasing guidelines.  If your customer falls outside of the leasing companies criteria for say credit and financial performance, then the customer is likely going to go through the vendor financing program and get declined.

With an equipment leasing broker, the broker collects the initial information from the customer or from the vendor, and puts together a financing package that is going to be best suited for certain lenders.

In this situation, the customer has a much better chance of getting financing arranged quickly due to the fact that the broker is working with a broader spectrum of lending or leasing criteria.

The lease company or finance company direct to vendor model only has the potential to work well when you  have a situation where your customer credit requirements are very consistent from one customer to another, AND the leasing company is a good fit for that exact credit profile.

Are There Any Other Key Vendor Finance Program Differences Between Equipment Leasing Brokers And Leasing Companies?

Once again, if the credit criteria matches the customer, both can be a good fit in terms of qualifying for credit.

But the next thing you have to look at is turn around time and level of customer service.

Leasing companies tend to have a more generic level of customer services where you may need to change your business or sales model to fit the way that they do business.

With an equipment leasing broker, there tends to be more opportunity for the individual broker to customize the application and administration to more closely fit the needs of your sales process and the needs of your customer.

To have a highly effective and profit enabling vendor lease program, both the coverage of the customer credit spectrum and the level of customer service provided are going to be very important to get right.

Does Your Business Need To Provide A Customer Leasing Program For Your Customers?

Business to Business customer leasing for equipment that you may be selling has been around for a long time, but still completely understood by most businesses selling products that would qualify for lease financing.

The premise is to have equipment leasing options readily available to your customers in the event they require financing to complete a purchase transaction. Regardless of the industry, whether you need medical leasing or manufacturing leasing and anything in between, a customer leasing program is possible to arrange and put into place.

And while there are lots of leasing companies out there, its not always so easy to get a system in place that actually helps you make sales.

First of all, working with only one leasing company in many cases is a complete waste of time if your customer profile is broader than the lease financing requirements of that particular company.

As an example, if you have an “A” credit leasing company ready to take customer applications for financing, but the customer has “B” or “C” level credit, then its not going to do any good at all and may even cost you the sale.

Even if you have a setup that is working reasonably well, there are likely other leasing options you could add to the mix that you customers would appreciate and that would also potentially increase your sales closing ratios.

Get A Customer Equipment Leasing Program or Vendor Financing Program That Meets Your Business Needs.

The most effective customer equipment leasing programs are administered through a leasing broker that is set up with leasing companies capable of servicing the credit needs of your customer profile.

The best run programs provide your customer leasing requirements to the broker who quickly reviews the information and then redirects it towards the most relevant leasing source in order to increase not only the speed of the overall process, but the chances of short term approval success.

Even when customer equipment leasing programs are set up in this manner, they many times are not run by leasing brokers with enough experience to really add value to the process and/or do not have a broad enough spectrum of leasing sources to adequately cover off the needs of your target market.

If you’d like to set up a customer equipment leasing program for your business or would like to improve upon what you already have, I suggest that you give us a call for a free assessment of your options.