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.