Whether this is the first time that you are considering asset financing for your business, or you have used asset finance companies many times in the past, choosing the right finance provider is a very important decision for you and your business. Both you and the financing company are making a big commitment that should not be taken lightly. Here are 7 questions to ask which will help you to ensure that you make the right choice:
1. Is the company a broker or do they lend their own money?
If you are dealing with a broker, you are dealing with a company that has access to a number of different providers on the market, which can often mean a larger selection of options to choose from. The disadvantage of this is that you may have to deal with several different people when applying for finance, and have to consider the merits and reputations of several different companies before choosing a supplier. Additionally, as a broker is paid a fee for a referral, there is no guarantee that they are acting in the best interests of you and your business. Conversely, an independent finance house will likely have far fewer options to choose from, but you get the advantage of dealing with one person throughout the application, and often that same person will be your point of contact throughout the financing period too.
2. Will you have the same point of contact throughout?
Many large companies that provide asset finance operate credit departments, meaning once the terms of the financing have been agreed, you will likely deal with different people whenever you contact the company, or if they contact you. Perhaps you are happy with this arrangement, but it is important to understand how and who you get in touch with once the terms have been agreed. With a smaller independent lending house, you are much more likely to deal with the same person throughout the entire process.
3. Does the company understand your industry well?
As a business owner you will appreciate both the importance and value of dealing with suppliers that understand your industry and your business well. This shouldn’t be any different when choosing an asset finance company. Many providers of asset finance specialise in a few key markets or industries, particularly as the businesses that require asset financing generally fall into a handful of different industries. You can ask the person that you’re dealing with what experience they have working with companies in your industry.
4. Are you confident in the expertise of the people you’re dealing with?
Following on from the point above, expertise goes much further than just knowing your industry. The person needs to be an expert in asset financing and be able to build up a clear picture of your business. Are they asking the right questions to uncover your requirements and suggesting what they feel in their experience is the best solution to match your requirements? Are they asking the right questions to gain a solid understanding of your business?
5. Is everything clearly explained?
In the past, a small minority of asset finance companies built up a bad reputation by being unclear in their terms, which can create huge problems for a business owner. Choosing financing is a big decision and commitment for you and your business, whether you’re lending a few thousand pounds or a few hundred thousand pounds. It’s therefore very important that everything is clearly explained and broken down for you, and that you feel the asset finance provider is being fully transparent throughout the entire process. If you are unclear about anything, it is essential that you receive clarification before agreeing to the terms – any reputable provider will be more than happy to do this for you. Ways you can initially determine the credibility of the lender include looking at how long the company has been operating and also how long it has worked with some of its customers; the best, most reputable companies often have long-standing relationships with many of their clients.