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Get enough information from and about bidding lessors to decide whether to include them in
bid process. If possible, ask for financial information from potential bidders to evaluate their financial condition. Also, if you can, obtain a Dunn and Bradstreet report (“D&B”) for each bidder. In
D&B report, look for lawsuits filed against
lessor, judgments, severe payment delinquencies, poor financial performance and similar issues that might impact performance on a new lease transaction.
Ask for and check customer, vendor, bank and trade references for each lessor. Contact each reference and verify key information given to you by
lessor. Ask how
lessor handles its account and whether there have ever been any problems or issues. Ask customer references about
lessor’s ability to perform and about attentiveness to customer problems and concerns.
Investigate bidders online. Check Google (www.google.com) to see whether prospective bidders appear in any newsworthy articles. Hit
message boards and newsgroups. Look for unresolved problems, fraud, financial problems, success stories, and awards. Visit bidders’ websites to get as much information as possible before extending an invitation to bid. You may be able to screen out undesirables.
Lastly, make sure prospective bidders belong to one or more industry trade association. While membership alone does not speak for
integrity or expertise of members, most of
associations set standards of conduct for their members.
A Word About Lease Brokers
Lease brokers serve roles similar to insurance brokers. They profit by placing lease transactions with
ultimate financing sources for those transactions. You should decide whether a lease broker would serve you better than seeking direct bids from lessors. Lease brokers can be useful in finding sources for difficult transactions, due to weak credit or unattractive equipment. They also can be useful in placing transactions that are highly specialized. Only work with lease brokers who have high integrity, who have a good understanding of leasing, and who understand
market you are in.
The entry bar for becoming a lease broker is relatively low and not all brokers are well trained or reputable. Check
broker’s references and capabilities thoroughly. Check to see whether
broker belongs to
national trade association for lease brokers, NAELB (www.naelb.org) or to one of
other major equipment leasing associations. Use
same guidelines for evaluating brokers as outlined above for leasing companies.
Parting Words Of Caution
Avoid high-pressure lease sellers. Whether they are brokers or leasing company representatives,
odds of you being misled or disappointed with
outcome are very high. Only work with lease representatives or brokers who have a good understanding of leasing and who are sensitive to your needs. To do otherwise might result in delays or disappointment.
Avoid giving lease deposits or advance rentals to brokers. Brokers do not provide
financing directly and, in possession of your money, represent a potential credit risk.
If
lease broker or leasing representative says anything that constitutes a significant misrepresentation, walk away. Chances are
first such misrepresentation won’t be
last. There are too many knowledgeable leasing professionals with high integrity. Avoid spending time with those who are unprofessional.
Lastly, make sure you get at least three or four lease bids from qualified lessors, if you can. At
end of
day, lease pricing is market driven. Getting several bids will help ensure that you get competitive pricing and terms.
Choosing
right leasing company is worth
effort. By taking a few easy steps during
planning and bidding phases of
lease procurement process, you can eliminate or greatly reduce time wasted with unqualified lessors. You can also avoid getting
run-around. Allow enough time to carefully check out all bidders. Be partial to lessors with high integrity, great reputations for performance, good expertise and who communicate well with you. You will invest a little time upfront, but you will thank yourself later.

George Parker is a Director and Executive Vice President of Leasing Technologies International, Inc. (“LTI”). Headquartered in Wilton, CT, LTI is a leasing firm specializing nationally in equipment financing programs for emerging growth and later-stage, venture capital backed companies. More information about LTI is available at: www.ltileasing.com.