eLease Equipment Leasing

Every company needs a limousine right? Well, maybe not every company but a country club that is trying to become a destination nightclub certainly does. In general, a great time to lease is when you are a successful business that has hit an earnings plateau requiring major capital expenditures to move in new markets. If your company has a steady flow of business coming in you don’t want to burden that thriving part of your company with huge equipment costs for an untested venture. By leasing equipment rather than purchasing it you can insure your existing business is not disrupted by expansion. In other words, leasing lowers your risk and increases your chance of success.

I was excited to help this business grow but when I processed their equipment leasing application I ran into a common problem: exposure. Not the exposure that you are thinking about, leasing exposure.

What is exposure and how can in impact my business?

All leasing companies set a limit on the amount of money they will loan a particular company based on financial criteria that is often referred to as exposure. Once this limit is established is easy to add equipment onto existing leases or start new leases as long as the “total exposure” is still under the set limit.

The country club was in good financial standing. In fact, eLease had already funded a lease a few months earlier for their new management software. While the new lease request for the limousine was less than the original lease for management software the “total exposure” of both the management software and the limousine was higher than the limit that eLease had set for the company.

Computer based scoring systems that run most leasing companies would have declined the country club instantly for having, “too much exposure.” This highlights two important things to know about leasing. First, work with a leasing company that has a real person looking at every deal. Secondly, find a salesperson that has some equipment leasing experience so they know how to work around some of the common leasing hang-ups.

I was able to prove that the country club had already grown from the time eLease had financed their management software and was continuing to expand. This growth dictated a revaluating the “exposure” limit. When the companies “exposure” limit was adjusted it was increased by enough to lease the limousine. The deal got done, the company is doing well in their new endeavor; all part of a days work.