If you’re in the business of selling equipment as a licensed dealer or reseller there is only one thing worse than not having a vendor equipment financing program in place, and that’s having one that doesn’t properly fit the needs of your business and your customers.
Let me explain.
For leasing companies, vendor programs are their life blood.
Getting regular deals sent to them by dealers and resellers is how they maintain a regular deal flow, pay the bills, and turn a profit.
Sure, most leasing companies will look at “one off deals” where a business will come to them on their own looking for financing, but for most of their business, the vendor programs are the gold.
The problem with this for the vendor is that not all lease companies and their intermediaries are going to be working with your business’s or customer’s best interest in mind.
Many times there is a poor match up between vendor and business owner which can cause a number of problems.
First of all, if you have a vendor program that only works through one leasing company, you are going to be at the mercy of their program, lending criteria, sudden changes in policy, etc.
As a result, they could be charging your customers higher rates than they could get else where in the market, provide less than stellar customer service, and not have any funding options other than for those with near perfect credit.
With respect to customer service, in many cases your customer is working through a generic leasing desk that may even be outsourced that is providing service to many other companies. The inconsistency 0f this service from one customer service rep to the next can potentially impact the time it takes to get a leasing decision made as well as getting one back in the customer’s favor.
If you have an affluent customer base with solid credit and some level of patience, this can still work pretty well, provided the day doesn’t come when the leasing company says that they can no longer take any more of your customer applications because they have filled up their portfolio quota for the type of equipment you’re selling and/or the industry you’re selling to.
The best vendor equipment financing program in our opinion need to 1) cover off as broad a spectrum of applicant credit profiles as you are likely to encounter; 2) provide dedicated customer service attention to you and your customers; 3) have the scalability to always have financing available to your customers no matter how fast you are growing your sales or what level of sales you are maintaining on an annual basis.
To find out more about how to properly set up a vendor equipment financing program for your business, give us a call and we’ll go over everything with you first hand.