Does "Simple" Describe Your Leasing Experience?
Kevin F Clune, CLFP
I really wanted to write about the impact of the devaluation of the Chinese Yuan on the Leasing Industry, but then I received a comment from a customer and took it as a sign.
“Things could not have gone better; Clune’s process is simple and straightforward. The monthly payment mirrors the cash flow of our business and this (lease financing) could be a great way to acquire other equipment moving forward.”
This feedback from the managing general partner of a large law firm that recently started their first lease agreement with us underscores some of the primary benefits of leasing. The fact that this was a particularly complex transaction made the remark even more gratifying.
He cites just a few of the reasons business owners often choose a lease to finance necessary capital equipment and why equipment vendors offer a lease option to their customers. Even though these points have been discussed before, it is refreshing to have them validated by a satisfied customer.
Other types of financing typically require additional documentation that complicates and delays the credit decision. A bank usually will demand a substantial down payment and may totally avoid certain types of equipment as collateral. These factors can translate to aggravation due to lost time and lost business.
Most lessors recognize that a quick response and flexible terms are essential to remaining competitive. Also, a leasing company will provide 100% of the cost and is more likely to finance equipment that a bank or other source of credit may reject.
A cash purchase can deplete your liquid reserves or tie up your lines of credit. The law firm cited above recognized this benefit. For customers who own a seasonal business, the payments can be structured to match their projected income schedule.
Just like all CEO’s, this customer is thinking ahead and recognizes the value of using a lease to finance future assets. An easy and reliable source of credit can be liberating to a business owner who needs to acquire upgraded equipment on a regular basis. They can stay competitive and still keep their costs within their future budget projections.
Leasing Companies can tout these advantages ad nauseum but they carry much more weight when they come from a satisfied customer. They have now been reiterated by the proverbial “horse’s mouth”.
If you are an equipment vendor, a customer may thank you for offering a lease option. If you are a business owner who is acquiring capital equipment, an equipment lease may be just the answer to realizing your strategic goals.
The Chinese Yuan discussion will have to wait for another day.
Kevin F. Clune, CLFP
Clune & Company
