Leasing has always been a smart way to do business. The advantages in conserving financial resources without needless drains on cash flow and credit ratings are obvious. Now, thanks to the Internet, the smart way just got smarter. Online leasing applies the digital revolution to the leasing industry. The advantages in flexibility, speed and lower costs, as well as reliability and convenience, are very beneficial to small and mid-sized businesses squeezed for time and facing emergency cash flow crises. Moreover, smart technology has now brought the ideal online leasing scenario into focus , the ability to pay for equipment with the profit it generates.
Cutting Down Overhead
Philip Adelberg runs PD Associates, a product-development consulting firm based in Pittsburgh, Pennsylvania. When he needed a desktop system and a laptop computer he scanned the Worldwide Web. Within two or three minutes he found an online leasing company and filled out the application form. “Fifteen minutes later the approval form was e-mailed back for the required financial deposit. Within 24 hours the equipment was on its way,” says Adelberg.
Adelberg sees the bottom line benefits very clearly. “Online leasing cuts down on overhead. Leased equipment doesn’t affect your credit rating in the same way as if you had made a purchase. You don’t tie up your capital in hard assets.”
Roger Lippross, president of NYM, Inc, in Arcadia, California agrees. “Many companies could not do their job without the significant advantages of both short and long-term leasing,” says Lippross. “We live in a world where the computer-controlled equipment we use is almost out of the week. If we want to stay competitive we have to stay up to date.”
Benefits, Plus!
Today 80 percent of U.S. companies lease some or all of their capital equipment. There are many obvious advantages to leasing and some hidden cost benefits the accounting department might not always see. For example, consider these important points:
F The use of leasing to acquire capital equipment allows businesses to preserve cash and bank lines for everyday needs , especially rent and payroll or emergency crunches.
F Leasing eliminates the worry and the cost of disposing of old assets and equipment.
F A leasing contract will often include your lessor’s willingness to help you find financing for maintenance requests. This is another timesaving convenience for the customer.
F Leasing enables businesses to get more recent equipment at a lower up-front cost. Many small businesses just starting up attempt to put a compatible office system together piece by piece. With leasing, a company can get needed equipment under one manageable payment.
F Too much equipment today becomes obsolete before it is paid for. “Who wants yesterday’s technology in today’s market,” asks Roger Lippross, “Leasing is obsolesence’s biggest foe.”
F With leasing there are no minimum balances sitting in the bank making money for them. Leasing frees the company’s money to work for it with no down payment required.
Online Advantages
Today it is now possible to approve requests of up to $75,000 within a couple of hours with online leasing. The credit application rarely takes more than a page. Who needs the burden of extra documentation and paper work?
Online leasing is as simple as it is effective. The steps are as easy as sitting down at your computer and logging on to scan the Web. First you obtain a quote, fill out the electronic application, and return it via the Internet. Within hours, your application can be approved and your leasing company then notifies the shipper the very same day. It doesn’t get much simpler than that.
Online lessors also have no time for haggling and hassling and throwing out ballpark figures. The very nature of the electronic process eliminates sales commissions, broker markups or referral fees. Think of what this means: no sales pressure, no hidden fees. What you see is what you get , all through a single point of contact.
High Tech/High Touch
Martin Dick, owner of Martin Dick Leasing in Pasadena, California has been in the leasing business for more than 35 years. He understands the one pitfall many have pointed out with e-commerce. “Most people want high tech as well as high touch, that is, they like personal contact and follow-up.” This is not as easy or even possible in many electronic relationships. He adds, “Good follow-up and personal relationships are the key to trust. This is very important when you’re leasing automobiles or trucks.”
These cautions are well taken. In choosing an online leasing company, check their Website thoroughly. Are they “just” a dot.com company? Check each page of the site. Is there a person to contact at each stage of the game? Does the confirmation order have a name and phone number you can call in case some points need clarification? This is called being “Internet-enabled.” The good online lessors have that capability and see follow-up as a key priority. Usually the Website will help you determine if this is a company specializing in online leasing or if they have other, more diverse, interests. Look for full disclosure of fees and other costs that apply. Do they offer fair market value? If you have doubts, check out the company track record with your local Chamber of Commerce or Better Business Bureau.
A Win/Win Relationship
In most cases online leasing experiences are true win/win relationships. “I have always found it to be very efficient and effective,” says Philip Adelberg in Pittsburgh. “I am still dealing with my original online source in California.”
Leasing gives you a choice: you either tie up your capital in hard assets, or you pay for equipment with the profit it generates. Online leasing makes that choice a whole lot easier. Online leasing is efficient, responsive and reliable. A good idea just got better.
Jon Albin is General Manager of SecureDirect, an online leasing company based in Irvine, California.
