How to choose an equipment leasing company
We recommend researching several equipment leasing companies before deciding which option is right for your business. Consider the following factors when comparing companies:
Financing possibilities
Loan limits vary depending on the leasing company, and the types of equipment that can be leased may be restricted. You need to make sure that the equipment you need falls within your lender's requirements.
borrowing cost
You should always ask your lender if there are any additional fees that may be charged and factor those fees into your borrowing costs as well.
Repayment terms
Lease options
Equipment leasing companies may offer different types of leases, including $1 purchase agreements and fair market value options. These options determine how you pay during the lease term and what happens to your equipment after the lease ends. You need to decide which type of lease best suits your needs and find a lender who can offer that deal.
Eligibility requirements
Speed of funding and application process
If you need funds quickly, online or alternative leasing companies may be able to provide equipment leases in as little as 24 hours. These financial institutions typically have a simple application process with minimal documentation. Traditional financial institutions, on the other hand, are slower to raise funds.
Industry and customer experience
The best equipment leasing companies have experience in the industry and can provide guidance through every step of the financing process. Ideally, your leasing company will provide you with a variety of ways to access customer support so that you can address any questions or concerns you may have regarding your lease agreement.
find the right business loan
FAQ
An equipment leasing company is a financial company that lets you rent the equipment your business needs in exchange for regular payments. Some equipment leasing companies allow you to rent equipment directly, while others facilitate the financing process for renting equipment from another vendor.
Some equipment leasing companies can accept borrowers with a minimum credit score of 550. However, the higher your credit score, the more options you have and the lower interest rates you can take advantage of.
Leasing equipment is a good option if you want to keep your monthly payments as low as possible and will use the equipment for 36 months or less. On the other hand, if you plan to use the equipment for a long time, financing the purchase may be a better option.
methodology
NerdWallet's review process evaluates and rates small business loan products from traditional banks and online lenders. We collect over 30 data points for each financial institution using the company's website and public documents. We also review the lender's initial application flow and may contact company representatives. NerdWallet's writers and editors conduct thorough fact checks and update them annually, but also throughout the year as needed.
Our star rating recognizes small business-friendly features such as interest rate and terms transparency, flexible payment options, fast financing times, accessible customer service, payment reporting to business credit bureaus, and responsible lending practices. Give points to the financial institution that provides it. We weigh these factors based on our assessment of which are most important to small business owners and how significantly they impact the borrower experience.
