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Tata Capital > Blog > Equipment Finance > How to Choose the Right Equipment Leasing Company for your Business needs

Equipment Finance

How to Choose the Right Equipment Leasing Company for your Business needs

How to Choose the Right Equipment Leasing Company for your Business needs

Every business needs state-of-the-art equipment to provide the best products for its customers efficiently. Equipment leasing is a convenient choice for businesses as it limits the upfront capital investment required and frees up limited cash reserves towards the company’s smooth functioning. 

By providing a much-needed breather for businesses, equipment leasing eases fund requirements to invest in new machinery or upgrade existing equipment. However, it can be challenging to choose the right Equipment Leasing Company that provides you the best deal and is most suited to your unique needs. 

Here are the factors you need to keep in mind while choosing the lessor, that is, the company that finances your equipment lease. 

Industry Familiarity

It would be helpful to have a lessor with experience in your specific industry. This familiarity ensures that you can avail of the financier’s expert advice and recommendations in addition to the transaction itself. An expert financier would have an in-depth knowledge of your industry, cash-flow cycles, machinery requirements, latest developments, and more. This insight can be an excellent asset for growing businesses.

Variety of financing options

There is no one-size-fits-all solution when it comes to leasing. Leasing transactions need to be structured according to equipment type, asset lifespan, and revenue forecasts. 

For example, a Capital Lease is long-term with a buyback option at the end of the tenure. It is useful when companies want to use the equipment in the long term and wish to own it. An Operating Lease is generally short-term and does not stipulate full-pay-out of the equipment’s cost at the end of the tenure. Such leases are relevant for assets that need frequent upgrades to avoid obsolescence. Make sure to review the variety of leasing options offered by a financier before choosing the right one. 

Additional Read: How to choose an equipment finance company in India?

Seamless operations

Digitalization has made the entire process right from application, documentation, transacting to renewals effortless and seamless. Ensure that the leasing financiers provide a digital platform to access all the information you need in a single interface. Does the platform offer real-time visibility to transactions and settlements and offer convenience to view or download lease repayment statements, interest, and tax certificates?

Trust and Transparency

Of course, it is a given that you would lookout for a company that offers competitive interest rates. But you must also ensure that the company is upfront about leasing charges and that there are no hidden costs. Since a lease is a long-term arrangement, the company must be transparent about the other expenses, such as processing fees, late fees, and foreclosure charges. 

Moreover, make sure to thoroughly go through the lease termination and expiry covenants in every lease contract. It would be best to know what your options are at the end of the lease tenure. How would the value of the asset be determined? What are your options to liquidate the investment if you do not wish to retain it? These are questions that could make or break your business in the future. 

At Tata Capital, we ensure complete transparency in the structure of the leasing arrangement from day one. Every customer is fully aware of the conditions they agree to when accepting a sanction. 

Reputation and Credibility

Leasing involves renting the latest equipment that are vital to the functioning of a business. Reputation and credibility of the lessor become crucial for such financing options. Established players that have run leasing businesses successfully for years provide you the assurance of stability and security of continued operations. Equipment leasing tenures can be lengthy, and you must have a long-term relationship with the leasing company you choose. 

Additional Read: What Vital Role does Equipment Financing Play in Reviving Business?

With over a decade of experience and expertise in the leasing domain, customers across industries rely on Tata Capital to offer the right leasing solutions. We tailor lease solutions to suit customers’ unique needs and provide a seamless experience with continuous support. 

Choosing the right leasing company is worth your time and effort! 

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