Roadblocks to Copier Leasing and Who Can Qualify:
Are you thinking it would be nice to have a copier lease, but you are unsure if you would even qualify? The leasing companies have some standards so it is a good question to be asking. We have helped hundreds or actually thousands of clients get copier leases, so let’s talk about what would make it so you qualify, or don’t qualify.
Roadblocks to Qualifying for a Copier Lease
Roadblock #1 to Qualify – Startup
One of the first things that can make it trickier to get a copier lease is if you are a startup. A startup, as designated by the leasing company is a business less than 2 years old. There is a lot of risk with startups, of course this isn’t personal to your startup – it is like insurance, a numbers game. According to the Bureau of Labor, 20% of new business fail within 2 years and 45% within 5 years.
When you are talking about a 5 year lease, this is a massive risk for the bank. Would you loan someone $10,000 if there was a 45% chance they would go missing during the time you were paying them back? Years 2 to 5 the bank likes to see if you have credit as that predicts well if you will be part of the 45% or the 55%.
So, if you are a new business, does this mean you can’t get a lease?
Not at all, what it will mean is you will need either to personally guarantee the deal (goes against your credit – normally need a credit score above 630), or do a cross corporate guarantee (meaning one company signs for another company – a corporate co-signing agreement.) It is possible to get a lease as a startup, but generally you will need to pay higher rates or guarantee the contract personally.
Roadblock #2 – Wrong Industry
Sometimes leasing companies get a particular feel about an entire industry. Maybe it is construction in 2008, or marijuana companies now. These specific industries can be considered a high risk situation, and in order to get a lease done at all in these situations, we normally need to find a specialty leasing company (higher rates).
Roadblock #3 – Bad Credit
If your company has a habit of breaking contracts or not paying bills, getting a lease will be hard. Of the three mentioned to this point, this is actually the most difficult challenge to overcome. What bank would want to loan someone money who shows they don’t pay it back? This is a challenge and in these situations we will often try a prepaid rental. Meaning we would rent the copier, but have the customer pay in advance a few payments (we would have the same concerns about getting paid.)
Do I Qualify
The basic rule of thumb here is a business who has had credit in the past, done a good job paying their bills, will have no troubles qualifying for a copier lease. Copier companies are motivated to help you get a lease because this is how we sell copiers and any good copier company will turn over every stone to get you qualified.
If you want to get a copier lease, give us a call and we would love to help your company get a lease!
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