This is not contributed to a lack of willingness on their part to correct or establish a good credit report, but to a lack of understanding laws that are available to consumer. The most important of these laws is Fair Credit Reporting Act; this act gives consumer right to correct any inaccuracies contained on their credit file. The act regulates credit reporting agencies, and what can be contained in consumers’ credit report. Yet, most important section of FCRA is it gives consumer ability to dispute entries that are obsolete or inaccurate, and items that may not belong to consumer. Correcting a credit report is not as easy as it appears; it requires a tremendous amount of time and effort on part of consumer.

The truth is that every person has right to correct their own credit, but dealing with creditors and credit reporting agencies is difficult if they are not familiar with credit repair process. There are a large number of books and do-it-yourself kits covering credit repair topics that consumer can purchase, but experience in dealing with these agencies is only way to get a good understanding of how entire process works. But for those that want to venture into this process without help of a professional, be prepared to exert a tremendous amount of time and effort to clear just one incorrect entry.

Plan Ahead

Before seeking lease proposals, invest a little time in planning and preparing. Establish priorities by considering relative importance of such factors as lease pricing, balance sheet considerations, ongoing leasing needs and necessity of prospective lessor to have specialized equipment/industry knowledge. If transaction is relatively insignificant in overall scheme of things, a truncated planning process might be in order. If not, allow enough time to: 1) identify and pre-qualify lessors, 2) review and select a lease proposal, 3) allow selected lessor to conduct due diligence and get credit approval, and 4) to complete lease documentation.

Assemble an information package for prospective lessors that anticipates what they will want to know before submitting a proposal, including: 1) background information on your company and management bios, 2) three years of financial statements and interim financials, 3) a list of company trade and credit references, and 4) a description of equipment to be acquired, including acquisition cost. Anticipate questions about your firm and disclose them in advance.

Choose Right Leasing Company

The starting point for getting an attractive leasing proposal is in choosing right leasing companies to bid. All leasing companies are not alike. Some specialize in specific industries, some in certain equipment types, and still others in transaction sizes. Leasing companies also vary in size, capabilities, expertise and integrity. Do your homework to pre-qualify leasing companies that will bid. Lessor qualities to look for include: 1) knowledge; 2) reputation; 3) ability to perform; 4) helpful business contacts; and 5) a relationship approach. Try to identify at least three leasing companies to bid.

As in any field, leasing professionals have varying degrees of knowledge and expertise. Look for leasing representatives and managements that have a good understanding of lease structuring, equipment issues, documentation, credit evaluation, capabilities of their firms, your industry and other leasing issues. Avoid lease ‘sellers’ with obvious limited knowledge. It is too easy to be led down painful path of misinformation and misrepresentation.

Because entry bar for setting up shop in equipment leasing is relatively low, it is important to locate leasing companies that have good reputations in business. Check to see whether bidding leasing companies belong to one or more of major industry trade associations (e.g. ELA, EAEL, UAEL, and NAELB). While membership in these associations doesn’t guarantee high ethical standards, each of these organizations has standards and processes to review members’ unethical business practices. Contact relevant associations for references. Then, get several names of customers, banks and vendors to contact.

Along with good ethics, ability to perform as agreed is equally important in considering leasing partners. Ask for and get financial information, background information on key managers, a listing of recently completed financings, names and contacts at key funding sources for each leasing company being considered. Review this information and follow up with contacts provided. If your industry and/or equipment to be leased are highly specialized, make sure leasing companies have completed several arrangements similar to one you are seeking. Check lessors’ websites and brochures to make sure that type of leasing arrangement you are seeking is specifically referenced and discussed.

Good leasing partners offer more than equipment financing. In many cases, lessors have met or worked closely with bankers, attorneys, CPA firms, business insurers, equipment vendors and investors. If leasing company serves a wide variety of customers, some of these contacts can prove invaluable. Try to get a feel for depth and breadth of each leasing company’s ability in this area.

Since you will be working closely with selected leasing company and may have additional leasing needs in future, why not choose a leasing partner that values relationships? Although it is not easy to identify relationship-oriented leasing companies at quoting stage, check customer references to inquire about lessor follow-up, attentiveness, willingness to learn about customers and willingness to be helpful.

Get a Large Enough Lease Facility

Right-sizing leasing facility can save a lot of time. Look for an arrangement that will cover equipment needs for at least next six to twelve months. A helpful rule of thumb is to obtain a leasing facility that is at least 20% more than what is needed. If a leasing credit line is an available option, this can be a helpful tool in securing right amount of lease financing.

Choose a Lease Term That Matches Equipment Use

The term of lease should match expected use of equipment as closely as possible. If term is too short, monthly cash outlays for equipment might exceed expected benefits to be derived from equipment (cost savings or revenue production). If you sign a lease that is too short that also includes fair market value end-of-lease options, and you exercise one of these options, you might wind up overpaying for equipment. If lease term is too long, you might lose flexibility of upgrading to newer more desirable equipment. More than a few lessees have been stuck with equipment they no longer need, yet they still have a significant lease balance remaining.

Notwithstanding your preference, a shorter lease term returns lessor’s investment in equipment faster and lessors generally perceive a faster recovery to be a credit enhancement. You might be able to manage any mismatch between your preference and lessor’s by obtaining favorable end-of-lease options. Seek end-of-lease options that include: 1) right to return equipment to lessor; 2) favorable renewal options; and 3) favorable purchase options. Seek ways to limit what you are charged by requesting fair market value options that are “capped” (have upper limits) or favorable fixed options.

Look For Lease Flexibility

Obtaining lease flexibility can easily trump obtaining lowest price. In fact, you can trim lots of money from overall leasing costs by having a flexible leasing arrangement.