Procuring new equipment is one of the toughest challenges Canadian business owners have to face. They know your state-of-the-art products can elevate their business to the next level, but they still settle for second-hand equipment sold in used dealing lots and auctions.
This is where vendor leasing comes in. By providing your business with flexible leasing solutions and streamlining your sales process, vendor leasing can make your products more affordable to your customers.
First Capital Leasing’s Vendor Loyalty Program can help your products fly off the lots all the while increasing your business’ bottom line. Having dealt in equipment leasing and financing in Calgary and across Alberta for over 25 years, our financial advisors have the experience and expertise to connect clients with your products.
A company that does vendor leasing allows its clients to directly lease the equipment it is selling. Vendor leasing essentially removes the need for a third-party lender, like a bank or a loan company. This leasing model typically requires a down payment and a promise of repayment in installments from the client. The client may also compensate the vendor with shares.
Vendor leasing can make some of your most expensive and high-end products more affordable to your clients. This is especially true for clients who are new business owners and lack sufficient credit to borrow significant amounts of money from a bank.
However, vendor leasing is not very common among equipment vendors. Vendor leasing exposes the equipment vendor to risk, as the client could default at any time. That is why the vendor often uses collaterals and charges higher interest rates than what a bank would.
Given the inherent risk involved in this transaction and that equipment vendors seldom have the financial expertise and resources of a bank, vendors tend to shy away from vendor leasing.
Partnering with an equipment leasing and financing company that offers a vendor leasing program can solve this problem. A vendor leasing program offers many advantages that offset the risks that come with this venture:
More flexible payment plans: Many equipment vendors are not equipped to directly support leasing for their clients. Through its vendor leasing program, a third-party leasing and financing company can help vendors come up with tailored monthly payment plans that adhere to their distribution strategy.
Customer Engagement: An equipment leasing and financing company can work with your clients directly to settle on leasing options and closeout sales. Not only does this service save the equipment vendor time and paperwork, but it can also help the vendor build a steady pipeline of loyal, trustworthy clients.
Marketing strategy: Top-end equipment leasing and financing companies also help you drive sales by getting involved in your marketing and branding efforts. An experienced agency can develop your marketing materials, increase the accessibility of your leasing and financing solutions, and refine your quoting tools and strategies.
While the vendor leasing program provided by an equipment leasing and financing company cannot directly shoulder the risks associated with vendor leasing, the financial and marketing resources that come with this service can help you better assess risks and secure more advantageous sales.
An equipment vendor that offers vendor leasing will always have an edge over those that cannot. The ability to support a more flexible payment plan for the client is often a difference-maker in closing sales. New business owners with lower credit ratings particularly depend on vendor leasing to procure premium equipment at an affordable price. Having a vendor leasing option in place can open up your business to a whole new pool of clients.
Partner up with First Capital Leasing to launch the first and only vendor leasing program you will ever need. With 85 years of experience leasing and financing equipment in Calgary and across Alberta, First Capital Leasing has the expertise to reduce the risks associated with vendor leasing and to make your sales strategies and processes appealing to your clients. Connect with us at 403-255-5508 or fill out the online contact form to learn more about our signature Vendor Loyalty Program.
Q: How can my clients apply for loans and leasing through your Vendor Loyalty Program?
A: First Capital Leasing will manage the paperwork, including providing your clients with customized loans and leasing applications that fit your business’ needs and timeline.
Q: What is the main risk with vendor leasing?
A: Often, the clients who need vendor leasing the most are also the most at risk of defaulting. That is why collateral plays such an important role in this funding arrangement.
Q: What is the difference between debt financing and equity financing?
A: Vendor financing can take on 2 forms: debt financing and equity financing. Debt financing entails the client borrowing money from the equipment vendor to buy the product and paying it back in installments with interest. Equity financing entails letting the equipment vendor gain partial ownership of the client via stocks. The client does not need to make cash repayments to the vendor.
We'd love to have the opportunity to understand your business and develop a strategy customized to your business' short-term needs and long-term goals. We boast a 95% approval rate through our vast network of underwriters (including a robust private portfolio).
Contact us at 1-888-251-3644 or complete the online contact form below. We look forward to connecting with you.