Now more than ever, financing options are becoming a HUGE factor in the equipment acquisition process. Salesmen of heavy equipment/capital equipment will tell you time and time again, the ability to control the financing process allows them to close more deals. In this economy, many companies simply cannot handle the burden of paying cash for new equipment purchases, even if the purchase is necessary. Small businesses all across the US and Canada are delaying equipment acquisitions until the economy turns around, even if the upgrade/purchase is well past due. As an equipment/technology vendor, the ability to offer comprehensive equipment leasing and financing options is a must, and the ability to control the financing process can be just as important.
Annual equipment leasing volume in the United States is now over $260 billion; looking closer, those figures reveal that over 35% of all capital equipment is acquired under an equipment lease contract. Equipment leases are a very popular financial tool that is currently used by over 80% of U.S. companies to acquire capital equipment. Your customers WANT to lease!
As a salesperson, you have a couple different choices when your clients inquire about leasing & financing options:
- Your company can finance the equipment internally- This option ties up cash and you may face future liability in the event of any defaults.
- Tell your client that you do not directly offer financing options- This may alienate your customer and drive them into the arms of another vendor that might be able to offer flexible financing.
- You can provide them a list of “approved” equipment leasing companies to choose from- The client is forced to pursue financing on their own. In this economic environment, the process cannot only be confusing, but very time consuming as well. Your customer can easily get lost in the sea of commercial financing options.
- Develop a relationship with a full-service leasing company- This option provides the vendor with a cash sale and gives the end-user flexible financing options. Full-service equipment leasing companies should be able to provide comprehensive financing for a wide variety of credits (not just your A++ credits).
To avoid delays and loss of control you MUST offer financing along with your equipment. But, as discussed, getting into the finance business presents a whole different set of challenges and your business is selling equipment, not financing it. During the slower summer months, take the time to develop a relationship with an equipment leasing company. Make sure they are able to offer marketing support and truly understand your market and clients. A proactive marketing partnership gives you the benefits of an internal finance company while avoiding the challenges, liabilities and exposure of being in the finance business.
Help your salespeople make more sales with less hassle… offer equipment leasing & financing options!