“What’s the rate?”
It’s the question that everyone always wants the answer to. Unfortunately, there are quite a few variables that make equipment finance rates differ depending on the funding source.
So how can you find the best rate for an equipment financing loan or lease?
To answer this question, we asked equipment financing professionals and business owners for their best tips on finding the best rate.
Here are seven ways to find the best equipment finance rate:
- Negotiate the Equipment Price First
- Get Local and National Quotes
- Develop Long Term Lending Relationships
- Fine Tune The Credit Score
- Use Search Formulas and Parameters
- Negotiate Based On Other Rates You Found
- Read Never Split The Difference
Negotiate the Equipment Price First
The best equipment finance rate typically comes from vendor finance programs. Typically a vendor will partner with an equipment finance company and come up with a program that provides rates and terms that motivate a customer to make a purchase. One piece of advice, negotiate the price of the equipment first and then talk financing. You want to make sure that the lender doesn’t raise the cost of the equipment just to provide a low financing rate.
Carey Wilbur, Charter Capital
Get Local and National Quotes
Like any major business decision, it is important to do your research and get quotes from both local and national financing companies. Sometimes business owners miss out on great financing rates because they go straight to the brand name companies before checking out the local options.
Noah Downs, American Pipeline Solutions
Develop Long Term Lending Relationships
Our company was founded in 1972, and we have vendor relationships that have carried on through generations of family ownership. We know that through these long-term vendor relationships, we can operate from a place of trust and transparency – which are critical to any business transaction.
Randall Smalley, Cruise America
Fine Tune The Credit Score
Whether you applying for equipment financing through a minimal disclosure application-only program or with full documentation, a lender is going to require a signed credit application. To prepare for this, review your credit report before applying for financing. By reviewing your credit report several months before applying for financing, you can detect erroneous information or work to address negative credit items that appear on the report. As a credit repair SEO company, we’ve learned that by fine-tuning your credit, you may be able to gain better rates because the risk of lending is reduced.
Brett Farmiloe, Markitors
Use Search Formulas and Parameters
Nearly everyone knows how to use Google search, but not everyone knows about using search formulas or parameters. For example, you might search for “equipment financing” and find the highest-ranked sites for those general terms. Instead, you could use a search like “equipment financing +used -loan” which would ensure that all of the results include the word “used” and do not have the word “loan.” The expected outcome would be that you would find financing options for used equipment that are structured in a way other than loans. The addition of these terms will help you find the best solution for your specific business.
Michael Alexis, Teambuilding
Negotiate Based On Other Rates You Found
The best way to find the best equipment financing rate is to negotiate according to other rates you’ve found. There is always leeway when it comes to discussing rates because companies are trying to remain competitive (as long as you aren’t a big risk to them). If you do your research before contacting each company to negotiate, you’ll have a better leg to stand on. Understand what each company’s service offerings are for the rate you’re getting and use that to negotiate prices down. If you get it right, and your financial behavior is good, you could end up getting much lower rates for the same quality of service.
George Birrell, TaxHub
Read Never Split The Difference
You can get the best equipment financing rate by improving your negotiation skills. I recommend reading Never Split The Difference to sharpen up your technique before making any deals.
Blake Murphey, Montauk Services