Wednesday , September 28 2022

What to consider when selecting a leasing company


More and more SMEs are using traditional leasing and long-term leasing because they are often cheaper, simpler and more efficient than investments. Of course, many people stop at a seemingly favorable price, although there are still a few very important elements to be considered.

Leasing market growth in recent years is also remarkable in Europe and Hungary. Experts say this trend will continue in the coming years. It is therefore worthwhile reviewing the decline and opportunities of a leasing company to avoid first-line bids and design failures.

Incorrectly thought out possibility may result in slow approval, inability of the lender to perform, hidden charges, or worse rental conditions. In order to secure the best lease, it is worth the prequalification of the leasing companies that are offered. When we talk about leasing, we think mainly of operating leasing (long-term leasing), but comparatively tangibly shows the role of other constructions, as the first step is to decide whether conventional or operational leasing is our preferred activity.

Principles to be considered

The first aspect is certainly flexibility. While large, typically leasing companies in the hands of banks or financial and industrial companies are undoubtedly highly qualified and cheaper than companies specializing in the provision of small and medium-sized businesses, they also do not like very specific ideas and requirements. This is true for a larger vehicle with its own configuration but also for a smaller production value or an IT tool that represents only the value of a particular user, so it will be harder to sell leasing companies later. It is therefore important to find specialized leasing companies that specialize either on individual assets, the size of the investment, a particular type of customer or segment.

According to the director of Rentasystem Balázs Székely, the client must understand that although refinancing allows a larger leasing company to work with one or two percent lower interest rates, but the whole process of a specialized SME firm may be much faster than the decision until the transaction is executed. These companies are able to handle the purchase of a completely unique car or machine and the price difference will be only a few tens of thousands of HUF – an expert in the market will be a brush.

For finance leases, the leasing asset is included in the balance sheet, operating leasing (long-term lease) allows for off-balance sheet financing. At this point, assets are not a long-term commitment, which improves the debt service indicator. In addition, it does not charge a payment and VAT refunds are also possible. Therefore, long-term leasing is faster.

This is what the buyer wants: it is a vehicle that is not available at home and requires a single purchase or choice of mass demand and discount vehicles. In the first case, a flexible SME financing company is a good choice, the company has a broader scope than the other, but you should also look at what a variety of services offer and what supplements you may need later.

Only some equipment (such as a car) or even more complex needs (auto, IT, machines) may be included in the company's future purchasing plans. If only one product line is interesting, it simplifies the search because many companies offer, for example, operating leasing for car purchases. Most companies usually finance one or two product lines. Therefore, if IT equipment, machinery, equipment and cars can be expected to be acquired in the future, or even energy improvement, it will sufficiently reduce the scope of leasing companies that can provide it in long-term leasing because they can have longer-term partnerships and better prices.

Good reputation, ratings, customer reviews, and image quality of the company are also important, so you should look at what other customers have received.

An important indicator of how they are contacted, how quickly the phone is picked up, how quickly a leasing company responds to a letter or request for a callback, how fast the offer is what it looks like is clear and aesthetic. It is clear whether the organization is profitable and that many transactions have taken place or not.

Last but not least, the price / value ratio is important. Is it worth a bit more money for a professional and flexible service provider or worth a few thousand forints a month? Who and who should be in contact with the rental during the next 3-4-5 years? Can there be a lease in a different range? Will there be a company there in three years? There is some specific need (for example, getting a completely unique car), which may result in some more.

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