Equipment Leasing 101
Thanks for taking the time to visit with us at Harris Leasing Company. We hope the information will help you find your way thru the equipment leasing and finance process.
Leasing and financing equipment can be confusing, but should be a simple process with the right lender.
Harris Leasing Company partners with a select number of banks and private lenders that we believe follow the same lending principles and ethics as we have since 1969.
- Is it the TRUTH?
- Is it FAIR to all concerned?
- Will it build GOODWILL and BETTER FRIENDSHIPS?
- Will it be BENEFICIAL to all concerned?
Some of you may recognize this as
The Rotary Four- Way Test. We work and live by this daily.
How does the process work?
Find an equipment vendor of your choice. This can be a manufacturer, a reseller or a private party sale.
- Negotiate the cash selling price. This should include any soft cost, (i.e. maintenance, software, delivery) and ask them to send you a detailed quote.
- Who is going to finance your equipment? Ok, the first thing you should be looking for is bank financing (if possible). It’s going to be your cheapest cost of money verses an equipment finance company. So, at this point you're asking yourself, why is he telling me to go to my bank? Companies like Harris Leasing stay in business because banks for the most part turn down 65-85% of loan applications. They don't typically like to do transactions under $100,000 and they prefer to lend to business having $5 million or more in annual sales.
- Dealer Incentives. You may qualify for 0% financing if you buy from a dealer new or almost-new equipment. That’s also something you should take advantage of if you can.
- Equipment Leasing or Financing Companies. The costs are typically higher, sorry you won't find 0% loans here, if you did we would not be able to stay in business. Those dealer incentives are being subsidized in most cases by the manufacturers, (kind of makes you wonder what the real cost is?) but rates vary depending on your business, annual finance charges can range from 6% to as high as 35% of the finance amount depending on your business situation.
And if you pay close attention, most leasing and financing websites will only show you that 5% rate which only a few of their customers can qualify. This is why we are very selective about what funders we work with.
There are no lost leader raters here, we are always ready and willing to give you an estimated range of monthly payments based on our initial phone call with you and we have a good track record of being in the zone
6. New or Used Equipment? Expect to make lower payments if you are buying new equipment or equipment less than ten years old, because many finance companies won't touch a deal with equipment more than 10 years old. However, there are some exceptions to this age rule - if you're buying hard assets i.e. yellow iron, forklifts - the equipment can be over 10 years old.
7. How long you have been in business? Who Qualifies and You’re Credit? If you've been in business for 24 months or more, you're going to get better rates than if you've been in business for 18 months or less. If a business is going to fail, it's most likely to do so in the first 2 years. That being said, if you are a new business less than 2 years old you can still qualify for leasing or financing. In most cases you will be looking at a maximum of $30,000 to $50,000 in funding, that might be available. Your personal credit is going to be a big factor in the overall approval of your application and its rates. It’s not the only thing that is considered but nevertheless still important.
Get Your Equipment Lease Started Today
At Harris Leasing Company, we take the time to get to know you and your business needs regardless of your credit history or if you are just starting out. Our leasing specialists will work with you to develop a custom finance program. Get started today! Call us at 713-783-7820 to speak with a representative OR start the application process here