By definition, an equipment leasing specialist is also an equipment leasing broker in that part of the role is to facilitate the transaction between the lessor and the lessee. But that’s about where the comparison ends.
In the equipment world, virtually anyone can be a broker. There are no formal qualifications, at least not in Canada, to become an equipment broker, so there are lots of individuals describing themselves as brokers who don’t know a great deal about the business.
A leasing specialist is a broker that has considerable knowledge and experience in the field of equipment financing and is more focused on doing what’s best for the customer than a non specialist.
With new or low knowledge brokers, the primary objective is to get a signed application for lease financing, send it off to as many leasing companies as possible, and hope that one of the companies funds the deal so the broker can get paid.
With an equipment leasing specialist, the first priority is to accurately assess your situation and needs and then focus your application efforts towards relevant lessors only. This is in tuned with hunting with a rifle instead of a shot gun and can not only greatly increase your chances of getting your request funded, but also get the best terms and conditions available to you.
The shot gun approach can cause a number of problems. First, unless the broker involved provides your credit report to all the lease companies that receive your application, there is a good chance that each company could pull one or more credit reports for you and your business. Not only do the extra inquiries negatively impact your credit rating, but it also can create unnecessary application declines when lessors see all the inquiries by other financing companies, indicating that the deal has been broadly shopped and may even have problems other lessors weren’t interested in.
Another problem with this approach is that the broker may generate an approval, but it could be for an inferior offer compared to what you should be able to secure in the market. But because the customer relies on the broker’s advise, they may not know this and actually end up with more expensive financing.
Brokers also retain their access with certain lessors by hitting volume targets, so they may not be motivated to get you the best deal if it means getting an approval from a finance source that adds your deal to their quota.
Equipment leasing specialists are customer focused and understand that doing right by the client will benefit them through referrals and repeat business.
Lease specialists are also well versed in helping you put together a solid application that proactively answers all the expected questions of the lessor. Managing the application process is an acquired skill and can make or break the deal. And once an approval is secured, there still can be considerable work meeting the terms and conditions which typically will be handled seamlessly by equipment leasing specialists.