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April 25th, 2019
There’s a lot to love about being in the equipment rental business. But setting up a new equipment finance agreement to update your inventory is not one of those things. In fact, the thought of that next contract may give you a queasy feeling.
Maybe it’s because when you approach the typical lender for financing terms, it feels like the deck is stacked against you. This blog will explain some of the common barriers that rental businesses encounter when it comes to financing new equipment for their customers, and how to set yourself up for success in the next round.
Parsing the legal language to uncover the truth of the finance agreement
When it’s time to finance new, updated equipment, a familiar process kicks off. That’s why once the agreement is in front of you, awaiting your signature, you may not look very closely at what it says. These agreements can make for some incredibly dense and dull reading. And when the lender assures you it’s boilerplate language, you may feel OK about signing on the dotted line. Because, after all, you’re busy, and it’s not like you have a crack legal team on retainer to pore over every detail.
However, translate each whereof and therefore into plain English, and you may find there’s more here to benefit the lender than the needs of your business. It’s enough to make your stomach turn. Here’s a common clause found in many equipment leases that’s ill-suited for rental companies: “Equipment must be located and used at said address.”
Obviously, that’s a terrible fit for those in the rental business. You can’t serve your customers and stick to your lender’s cookie-cutter agreement. The last thing you want is to live with a twinge of anxiety each time a customer carts away a trencher or compactor for their job. Because when they do, that leaves you technically in default.
That is why like any good business owner, you’d want to negotiate the terms of your leasing agreement. And there is the second problem: It can be very difficult to get a lender that’s even willing to come to the table (let alone read your invitation to meet you at the table).
This barrier comes about because of the structure of these online lending options and big banks. While convenient for busy entrepreneurs such as yourself, getting in touch with someone who can address your individual needs quickly can turn into a headache of playing phone tag and being transferred to yet another department in a different city.
That’s why in the rental business, you may find yourself in that tough spot, choosing to sign that risky lease agreement, hoping one of the “gotchas” lurking in the language won’t come up to bite you later.
The better solution for your next equipment finance agreement
Fortunately, there is a way to get an affordable finance agreement that doesn’t have you reaching for the bottle of antacids.
At First Western Equipment Finance, you’ll find we take a different approach to equipment leases. One that offers peace of mind.
First, we get it: No two industries with equipment finance needs are alike. Boilerplate works for some, but it can fail for others. After we take time to understand the needs and challenges of the industries we serve, we create agreements that work for their business.
If you’re in the rental business, that means you’ll sign an agreement that lets you actually rent the equipment to your customers with all the peace of mind you expect from going about your business.
And if you have questions and concerns about any aspect of your agreement, there’s no phone tag at First Western Equipment Finance. Just a dedicated program manager to handle everything from start to finish.
At First Western Equipment Finance, we believe leaving “gotchas” in the agreements is terrible for business. It does nothing to set up our customers for success. We know you’d rather work with a lender that takes time to understand your unique business needs and give you a square deal. After all, when it’s time to update your equipment, we want you to come back! Forty percent of the deals we sign come from repeat customers.
Discover how easy it can be to set up equipment financing. Contact First Western Equipment Finance today.