On Wednesday, October 26, 2022, the Bank of Canada announced an interest rate hike of 50 basis points to 3.75%, the sixth increase since March. This move is meant to rein in inflation and bring down the cost of living for Canadians over the long run. But many individuals and businesses are already feeling the pressure of rising inflation and higher borrowing costs. This can leave company’s scrambling as customers tighten their purse strings and purchase fewer goods. If you are in the business of selling a product or service, you need a strategy to support your clients and help them get the equipment they need, now more than ever. A vendor leasing program is an effective approach that allows your customers to purchase your products, for a more affordable, monthly amount. In today’s market, you need the tools and technologies to get that edge and recession-proof your business in this environment of increasing costs.
What Is Vendor Leasing?
A company that offers vendor leasing allows its clients to directly lease the products, equipment, tools, or machinery it is selling. Vendor leasing removes the need for a third-party lender, like a bank or a loan company, and finances the customer lease directly. This leasing model typically requires a contract of repayment in installments from the client and sometimes a down payment. The leased equipment is then used as collateral against the financing.
What Is A Vendor Leasing Program Or Partner?
Vendor leasing is not a risk-free proposition and many equipment vendors do not have the financial expertise and resources of a lender. For this reason, many vendors tend to shy away from offering their clients vendor leasing. Partnering with an equipment leasing and financing company that offers a vendor leasing program can solve this problem.
What Are The Benefits Of A Vendor Leasing Program?
Choosing to partner with a leasing company to build a vendor leasing program can allow you to continue to grow your business, even during these times of economic downturn, while offering your clients compelling financing options.
Here are some of the benefits for your customers:
- Lower Up-Front Costs To Purchase: Manageable monthly lease payments give your customers immediate access to the equipment they need without a substantial cost upfront.
- Cash Flow: Securing the equipment they need through vendor leasing allows companies to keep cash or bank lines available to preserve working capital for other aspects of their business, like covering expenses such as payroll or for company growth.
- Tax Benefits: Your customers can leverage tax benefits by leasing the equipment they need instead of purchasing it outright. Leasing can be considered an operating expense as opposed to a capital expense providing quicker write-offs and facilitating faster internal approval of expenses.
And here are some of the benefits for your business:
- Grow Your Client Base: Rising costs can negatively impact buying behaviours. Many businesses are strapped for cash and may be forced to compromise on growth opportunities because they cannot purchase the tools and technologies they need to thrive. If you can offer potential customers a way to lease the equipment they need with vendor leasing, you are at an immediate advantage over your competitors who do not do the same.
- Keep Existing Customers: What is better than a customer who purchases from you? One that comes back to you to purchase again. Vendor leasing means that you can re-engage your clients at the end of their lease term or whenever they need and introduce new models and technologies, without the need to re-apply. This gives you the opportunity to encourage your customers to upgrade equipment with your company.
- Strengthen Client Relationships: When you are able to provide effective and reliable financing solutions to your customers, you have the opportunity to build trust and lasting relationships. Even when the cost of borrowing increases, clients tend to choose to continue working with a company whose products and service they know they can count on.
- Timely approvals: Partnering with a leasing company like First Capital Leasing means approvals in under 4 hours or less, access to the best rates, 95% approval ratios, 90 Day No Pay and other agile payment options. First Capital leasing also provides digital quoting tools programmed directly into your website for quick quoting. Plus with our apply once, add on whenever service, your clients will never have to re-apply again.
To learn more about choosing the best vendor financing partner for your business,
read What To Look For In A Leasing Partner.
Provide Effective Leasing Solutions And Close More Deals With A Vendor Leasing Program
Tough times are ahead for many Canadian businesses, large and small. When you are in the business of providing equipment or service, a vendor leasing program is a strong way to beat out on the competition and increase sales by 30% or more. Vendor leasing is an approach that can benefit your business and your loyal client base. The preferred vendor program from First Capital Leasing can eliminate financial barriers while driving sales and generating profits. Our team will work with you to assess your company goals and how equipment leasing and vendor financing can be optimized to suit your business, small or large. Our equipment leasing experts will help you develop a vendor financing solution that will make your equipment affordable to your client base, while also ensuring your invoices are paid on time! Join our vendor loyalty program, by calling First Capital Leasing at 1-888-251-3644 today.
First Capital Leasing is a full-scope financial services provider with the knowledge and experience to create tailored lease financing solutions that meet your needs and your goals for your company. We can help you figure out which strategy can support your current operations now and in the future. We are based in Calgary, but serve businesses across Canada. For easy application and quick approval, fill out our online application. You only need to apply once and First Capital leasing will continue to be your financing partner for all your business equipment needs. Approval can usually be completed in less than 4 hours!* If you are ready to explore loans and leasing for your business, call our team at First Capital Leasing at 1-888-251-3644 or fill out our contact form today.
* Subject to credit approval
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 kind of benefits will vendor leasing offer?
A: Partnering with a vendor financing company will allow more of your customers across Canada and North America to afford your products over a longer period of time. You will also foster loyalty among your customers by getting them the equipment they would otherwise be unable to afford.