What To Avoid
What to Avoid When Leasing Commercial Equipment
- Avoid using cash or credit lines to acquire commercial equipment for your business.
- Cash flow impact: Paying upfront in cash for a semi truck, trailer, heavy equipment, or other machinery can deplete your cash reserves and impact your ability to cover other expenses or invest in growth opportunities.
- Opportunity cost: Using cash to purchase commercial equipment may mean missing out on other investment opportunities that could provide higher returns.
- Interest costs: If you use a credit line to finance commercial equipment, you’ll pay interest on the borrowed amount, which will add to the overall cost of the commercial equipment. You’re better off taking advantage of the tax writes that a commercial lease has to offer.
- Avoid using conventional bank lending
- Strict requirements: Conventional banks often have more stringent credit requirements and may be less willing to work with businesses with less established credit or lower credit scores.
- Lengthy approval process: The approval process for a bank commercial equipment lease can be more prolonged and cumbersome than other leasing options, which can delay the acquisition of the commercial equipment.
- Limited flexibility: Banks don’t buy older model commercial equipment and may have less flexibility in lease terms, such as payment schedules or end-of-lease options.
- Additional collateral security: conventional banks and credit unions often require extra security beyond the leased commercial equipment. This can be a lien on other business assets, General Security Agreements (GSA’s) or personal guarantees from the lessee’s owners.
- Lack of specialization: Banks may not specialize in equipment leasing and may not have the same expertise or options as other leasing companies focusing specifically on equipment leasing.
- Avoid not discussing your situation upfront with one of our commercial lease specialists
- At the first point of contact, a commercial lease representative at Go Lease will ask you questions about your business to better learn your needs. These discussions will enable us to procure a tailored approval as quickly as possible that suits your needs. Without this upfront discussion, your needs may not be adequately met.
- Avoid not getting the right semi truck, trailer, heavy equipment, or other machinery
- You will know better than anyone what commercial equipment you need for the job. Some lease and finance companies have restrictions on age or mileage. We can approve older, late model, high mileage, and high-hour equipment. Just ensure you aren’t getting junk and are comfortable with the commercial equipment, and let us take care of you.
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