Vendors can start associating with leasing or business financing companies to boost their sales by leasing and financing equipment to their customers. An equipment leasing vendor program comes into the scene whenever a potential customer has decided to buy the equipment from a vendor and cannot complete the entire transaction until they have acquired financing for their equipment.
The potential customers might even lose their interest and become discouraged due to the difficulties involved in buying the equipment during this process. They might even switch to their competitors, or their funding source might finance a competing product.
These are the scenarios that result in the loss of vendor sales. Vendor financing allows the vendors to offer their customers a one-stop solution for fulfilling their orders and acquiring equipment financing simultaneously. The customers also get benefits out of the vendor leasing as they do not have to attain separate funding that they need in pledging for collateral.
Using an Equipment Leasing Vendor Program for Business Growth
There are several reasons the bigger companies and smaller businesses hoard their cash.
It is because they wish to ensure they are prepared financially during emergencies. The other possible reason is that they wish to look good on their banks and other major financial institutions. The massive amount of cash shown on the balance sheet is one way to get this done. Or they are quite wise by being financially liquid.
With this being said, each company is looking for potential growth. The acquisitions, expansions, and diversifications show overall growth.
They often demand capital expenditures so that these milestones are happening. The same companies are wise in checking out options for undertaking these. This capital limitation of your clients must get addressed. They still acquired this same required equipment without imparting their hard-earned cash.
Essentially, you are retaining them as valuable clients with a forged relationship that is much stronger. They are loyal to you as the equipment provider to help secure the assets required to propel businesses to heights.
You can easily set up an equipment vendor leasing program with the help of the leasing professionals in advance to offer the equipment financing option to customers. Customers buy more equipment from you whenever they have their equipment leasing approvals. We will discuss this point more for the acquisition of the equipment.
Overview of Equipment Leasing Vendor Program
The equipment leasing vendor program portrays the relationship between the equipment finance company and the equipment seller. They come together, offering custom, competitive and ethical business finance solutions to their customers who are in search of acquiring the equipment right from the seller.
Benefits of vendor equipment leasing programs
You might often have to say to yourself that you are selling equipment and why you should offer to finance. The vendors offering the equipment financing options are selling more equipment. Remember that even if the customers can afford to pay cash for their equipment, equipment leasing or financing offers real benefits. These are included, however, not limited to tax relief, cash-flow management, preservation of the credit lines, and the ability to stay ahead of the technological curve.
- 100% Financing
The vendor equipment leasing and financing programs allow the traditional “soft costs” such as the freight, installation, licensing, and training to get included in the amount financed. It helps in further reducing the initial out-of-pocket costs for the clients.
- Private Label Financing
The private label vendor financing programs allow you to take the feel and look of the captive vendor finance division without the task. The marketing department can create custom applications and other materials with the company logo and color scheme. The customer’s online equipment lease applications and calculators are available.
- Industry Expertise
Having a vendor equipment leasing company at your side who understands the industry is extremely vital. There are companies with experience in offering vendor finance programs across each industry imaginable. The talk is the industry term we understand with the customers offering flexible equipment financing options.
- Minimal Cash Upfront
Cash always stays like the king. Your customers can use their cash better instead of tying them to the expensive purchase of equipment. The vendor financing programs need a bit of money in advance with customers who can enjoy the immediate use of the equipment along with the tax benefits at the end of the year.
- Easy selling process
Instead of selling the entire cost of the project or the equipment, the vendor equipment financing program helps you sell a monthly payment lower than the kind that equipment generates out of profits. It allows the customers to justify the massive purchases being paid over time from the equipment acquired.
- Reducing the sales cycle
The old man’s take is true as time kills the deals. The equipment vendors require all the tools available to reduce the sales cycle. The streamlined application, funding, and documentation process allow your customers to achieve the equipment they require and get your vendor paid rapidly. We are also offering same-day documentation and approvals.
How does the equipment leasing vendor program work?
The business financing company approves the equipment lease agreement between the acquiring company and the equipment vendor.
The vendor ships the equipment once the pre-funding or purchase order is received. Scheduling for the installation is set, and training is offered regarding the equipment used.
After the installation is done successfully, the business financing company gets in touch to acquire the company to verify the procedure. They are paying the balances to their vendor. If everything is good with the installation is when the equipment lease program agreements start officially.
Why should you consider the equipment leasing vendor program?
Businesses often bear additional costs whenever they are expanding their operations, and these are expenditures demanding a lot of money in terms of the undertaking. As already mentioned, the companies need to hold on to their cash throughout the term they operate.
The equipment-leasing vendor program is the ideal way to help spur the sale of equipment for your business. You will allow your customers to retain their capital by offering the equipment leasing program, and they are not walking out of your place empty-handed. It is important to realize equipment sales and customer loyalty as an equipment vendor.
For both you and your customer, it is a win-win scenario. There are plenty of other benefits whenever the equipment is leased for both the lessee and the lessor. The equipment is continually acquired and updated since it is not owned.
Some smaller businesses and companies are not stuck with similar equipment for the entire lease. You can also make additional sales through this process by offering the equipment upgrade in the middle and at the end of the equipment lease.
The maintenance of the equipment is rolled into the lease payments and taken care of by the vendor. It involves a better cash flow for the company. The customer has greater purchase power for buying more equipment and trucks than they require to get the job done.
Lastly, under the FMV lease, the lease payments are being made by the company and the small businesses to get deemed tax deductible. When it gets structured like a loan or a $1 buy-out lease takes the benefits of the Section 179 tax.
These are the main reasons which make acquiring small businesses and companies beneficial.
But you are investing in this relationship as an equipment vendor and making greater sales. These companies and small businesses are steadfastly loyal to you since you take care of them and their equipment throughout the life term of the agreement.
Finding the Right Equipment Vendor Financing Company
The equipment vendor must often partner with the right equipment financing company offering business finances to their customers.
It is best if the business financing company specializes in the same industry field belonging to the equipment vendor. In this way, the equipment financing company knows the nature of the industry and speaks wisely to the customers regarding the benefits of your equipment, the ROI of the equipment, and the benefits of equipment financing and leasing.
Additionally, the right equipment financing companies to pick mainly have streamlined programs for the vendors.
You owe it to your company to help businesses grow, especially the small business as an equipment vendor. You need to present them with equipment leasing payment options that allow them to go ahead with acquiring the equipment and stay liquid.
Getting this done will help afford your company steadfast and loyal customers, as they will be with you for a longer time while embarking on the road to progress and growth using the equipment you have.
Therefore, you can go ahead in forming a good partnership with the equipment leasing company while offering them the best equipment leasing vendor program.