Leasing has lots of great features from tax deductibility to easy monthly payments to buy out options. But don’t be lured in by sleazy leasing companies tricking you into thinking that you are pre-qualified.
Beware of the company that calls you and says 'Congratulations. Because of your great credit rating with Dun and Bradstreet, you have been pre-approved for a $50,000 line of leasing credit. Just call our leasing representative to activate your line of credit'
If this happens to you, just hang up. You have not been pre-approved for anything. This is not a lease agreement. All you’ll be doing is filling out an application for credit approval, but you will not be automatically approved.
In the meantime, because you think you are approved, you’ve gone out and picked out the perfect piece of equipment for your business.
All of a sudden, your “reputable” leasing company tells you that your rate or monthly payment has gone up because of something they found on your credit report. It now becomes obvious to you what is happening and realize that you were never pre-approved in the first place.
Now you’re in an embarrassing situation. You either have to tell your equipment vendor that you were never pre-approved, and that there is a problem with your credit. Or, you save your reputation with the vendor, and pay the higher rates with the leasing company.
And another thing. Make sure everything is written down in the lease agreement, and you understand it. If it’s not in the contract, it’s not in the deal.
If you do your homework, leasing can be the best way to go for you.
