How To Select The Right Lease Provider For Your Niche Industry
How to select the right lease provider (lessor) is a common worry for finance and procurement departments alike, each with its specialised needs.
From hill farming to micro-brewing, construction to manufacturing, and everything in between, if you have a very particular niche industry or the need for a highly-specialised piece of machinery, you understandably want to find a provider you can trust.
Using a generic lease provider runs the risk of not being offered the expert support and understanding about your particular industry needs. Your asset provider needs to understand the niches within your niche, pardon the pun. So, you’re doing right by finding out how to qualify your lessors.
Here are four tips for choosing the right lessor to provide you specialised asset.
1. Exhaust Your Network & Negotiate Openly
Using the example of a particularly niched piece of manufacturing or construction equipment, it’s near enough certain that there will be someone in your network of contacts who have acquired a similarly unique asset previously.
If a friendly competitor (perhaps a bigger or smaller player in your network) or part of your supply chain has had to lease a particular machine or piece of plant that was out of the ordinary, see if you can find out their provider’s details.
Ask your mutual contact how the asset performed, whether they were happy with the agreement terms and conditions, and see if they would recommend that you use the provider.
Once these checks are complete, approach the lease provider in an honest and reasonable way. Obviously, you don’t want to appear desperate for a quick-fire agreement to be signed so that you can start using this asset, but you do need to be prepared to give a little when it comes to negotiating because, by very nature, the niche resource is scarce.
What works in your favour, however, is that the market of lessees should also be equally small. Potential customers to the provider won’t come around as readily as more popular leasing markets, therefore, you have an ace up your sleeve – you may get to use it.
It’s best to negotiate an agreement which benefits both parties.
2. Create Your Own Provider Option
If canvassing your network does not throw up any potential providers, see if you can demonstrate to an existing lease provider that it’ll be in their interest to add your type of niche asset to their roster.
Granted, this request might be a hard sell, “Can you buy this asset and lease it back to us?”, but it could open up a whole new market to the lease provider; that’s the benefit to them that you should push. Engage in conversation with your existing lease provider(s) and see if they are open to at least looking into the feasibility of offering additional assets to your niche industry.
3. Contact The Manufacturer Directly
If your network of contacts and your own lease providers cannot offer you the asset that your niche or industry requires, contacting a manufacturer directly is another possible option.
Similar to the above point, it may open up further avenue streams for them because others in your industry may want to lease that kind of asset in the future. This new business opportunity should allow you to negotiate a favourable deal in return for bringing the manufacturer new revenue streams. Indeed, the manufacturer may have its own in-house leasing arm or an “official” and therefore endorsed leasing partner.
There is also the possibility that the manufacturer might be looking for a partner company to help with the testing and development of assets needed in your industry, opening up the possibility of you having the latest technologies and at an affordable rate.
Furthermore, if you can work with the manufacturer to develop and prove that their machinery or plant works, you’ll have a jump on the competition and be using a future industry staple long before anyone else.
When it comes to checking that a lease provider is reputable, it’s hard to beat a manufacturer who is trying to gain a foothold in your industry and needs to demonstrate their product (the asset) is reliable and helps their customers (you) to drive productivity and profit.
4. Consider Outsourcing to Leasing Experts
An alternative approach to procuring the niche assets you organisation requires is to seek the expertise of specialised lease management experts and consultancies. Companies such as Innervision have a wealth of industry knowledge to call upon and will help you find, compare and negotiate new leases that are right for your organisation. With an extensive list of trusted lease providers to call upon, receiving competitive quotes from a broad range of lessors will help ensure your organisation finds the best possible lease deals at the best market rates.
Aside from new lease arrangement and lease negotiation, most outsourced lease management service providers will offer several other services that are beneficial to any companies that lease. Raging from full lease portfolio management to lease expiry, these services are aimed at improving the overall efficiency at every stage of the lease life cycle.
There's More To Leasing Than Finding A Reputable Provider
Once you have found the right provider for your leased asset, it’s important that you are also aware of the wider implication of leasing. There are plenty of benefits to leasing that you and your business can take advantage of if you are armed with the right information.
Take a look at this free download, and some more advanced guides we offer to get a grasp or go through a recap of the basics of leasing.
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