Tuesday , August 9 2022

What to Consider When Choosing a Leasing Company


More and more SMEs use traditional leasing and long-term leasing because they are often cheaper, simpler, and more efficient than investment. Of course, many people stay at a seemingly advantageous price, although there are still some important components to consider.

Leasing market developments in recent years are also remarkable in Europe and Hungary. Experts say that this trend will continue in the next few years. Therefore, it is worth examining what the decline and opportunities of the leasing company choose to avoid firsthand and construction errors.

A non-carefully considered alternative can lead to slow approvals, the lender's inability to perform, hidden fees or worse rental terms. In order to ensure the best rental agreement, it is therefore worth prequalifying the bidding companies. When we talk about leasing, we primarily refer to operating leases (long-term leases), but the comparison shows concrete role as other constructions, as the first step is to determine whether a conventional or operational lease is our preferred business.

Principles to be taken into account

The first aspect is definitely the flexibility. While large, usually 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 SMEs, but at the same time they are not fond of specific ideas and requirements. This applies to a larger car with a custom configuration, but also for a smaller value or IT tool that only represents the value of a particular user, making it more difficult to sell to the leasing company later. It is therefore important to find special leasing companies that specialize in either a single asset, a given investment size, a particular type of customer or a segment.

According to Balázs Székely, CEO of Rent Systems, the customer must understand that while refinancing allows a larger rental company to work at one or two percent lower interest rates, the whole process of a SME-specialized company can be much faster than the judgment until the transaction is performed. These companies can handle the purchase of a completely unique car or machine and the price difference will only be a few tens of thousands of HUF – the market will brush.

For finance leases, the leased asset is included in the balance sheet. Operating leases (long-term leasing) allow for off-balance sheet financing. At this point, assets are not long-term liabilities and this improves the debt-to-GDP ratio. In addition, it does not charge creditworthiness and VAT contributions are also possible. Therefore, the long-term lease is rapidly advancing.

It's about what the buyer wants: it's a vehicle that's not home and requires a single purchase, or a selection of mass needs and discount vehicles. In the first case, a flexible finance company for SMEs is a good choice, the company has a greater scope than the latter, but you should also look at what the service palette for the given company offers and what extra features you may need later.

Only one type of equipment (eg a car) or even more complex needs (car, IT, machines) can be included in the company's future purchase plans. If only one product line is interesting, it simplifies the search, as many companies offer, for example, operating leasing services for car purchases. Most companies usually finance one or two product lines. Therefore, if it is expected that IT equipment, machinery, equipment and cars will be acquired in the future or even energetic improvements, it will be limited in the range of leasing companies that can provide this in a long-term lease, company, because they can have a long-term partnership and better prices.

Reputation, ratings, customer reviews and image quality are also important aspects, so you should look at what other customers have received.

An important measure of how the contact process is, how quickly the phone is retrieved, how fast the leasing company responds to a letter or recall request, how fast the offer is, what it looks, understandably and aesthetically. It is clear whether the organization is profitable and that many transactions have taken place or not.

And last but not least, the price is important. Is it worth a little more money for a professional and flexible service provider, or is it worth a couple of thousand forints per month? Who and who should be in contact with the lease for the next 3-4-5 years? Can there be a rent intent in another assortment? Will the company be there in 3 years? Is there a specific need (for example, getting a very unique car), which may be worth a bit extra.

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