Who actually holds your lease may surprise you.
There are some great reasons to finance office printers or copiers through leasing. However, who actually holds your company’s printer device lease depends on an array of factors. Though most companies would prefer to keep their leases in-house with the dealership to simplify matters, leasing and financing are sometimes handed off to secondary entities—either through the manufacturer, through a third-party, or via a “private label” lease.
But what are the implications of each of these paths? In this piece, we’re going to deliver a basic understanding of each of these types of agreements and why you may want to go with them...and why you may not.
In-House or Manufacturer Printer & Copier Leasing
When it comes time to shop for new copier or printer equipment for your company, your first stop will likely be a manufacturer-affiliated dealership. This may be through a business solutions company, device manufacturer, or a stand-alone dealership.
Once you’ve decided which models best meet your organization’s needs, next is the question of leasing and financing. For most companies like yours’, keeping your leasing in-house with this dealership or manufacturer makes the most sense. The simplified invoicing aspect of this arrangement also tends to keep you on your bookkeeper’s good side.
In-house leasing may even allow for greater flexibility when it comes to handling service-related issues or re-negotiations down the road. For instance, if you prematurely wear out a few of your machines before the end of your lease, it’s much easier to strike up a better deal for replacements than it would be if you had to also loop in a third-party leasing company. Such a third-party entity would be more preoccupied with you paying out your lease than risk losing your business to a competitor.
Why In-House Leasing or Financing May Not Work
Though in-house leasing is usually the first choice for companies, there are a few reasons why these leases may not be possible. The most obvious reason is that a company’s credit may not enable them to qualify for such options. A company is a new business, usually less than 2 years old with no established credit.
Another reason may be that the dealership may not be able to offer leasing or financing to specific higher-risk industries.
Yet another reason may be the price of the device in question. Higher dollar items, such as immensely expensive production printers, may be too much of a risk for in-house dealerships to finance or lease alone. For this reason, some in-house dealers may defer such companies to a “private label” leasing option.
Private Label Printer & Copier Leasing
Not every dealership is fully equipped to handle the leasing and financing needs of their potentially riskier or big-ticket-item clients. Still, such in-house dealerships want to be able to offer some of the benefits of a simplified invoicing and support process. For this reason, a dealership may provide what is commonly referred to as “private label” leasing or financing options.
A private label lease deal can mean a few different things. The most basic description includes a scenario when the dealership or device manufacturer has aligned with a third-party financing company to offer, for most intents and purposes, the best of both worlds—simplified support and third-party lease company capabilities.
Most private label leasing arrangements are designed to provide the semblance of organizational continuity while providing the rates and willingness to incur the risk that only a third-party leasing or financing can. Some companies who have private label leasing may actually be unaware that they are involved in such an arrangement had they not asked the right questions or read the fine print in lease terms and conditions. Even a call to the dealership or manufacturer to discuss the details of the lease may, in actuality, be rerouted to the third-party leasing company.
While this arrangement may seem sneaky, the details are typically outlined in the details of the agreement—making it essential that such companies fully read any agreements or contracts before signing.
Third-Party Printer & Copier Leasing
Leasing or financing may also be possible directly through a third-party company. These companies are usually financing divisions of larger national or international institutions. Even those utterly clueless of any printer or copier companies will likely recognize their names. These third-party financing companies may be recommended or brought in by device manufacturers or dealerships to minimize risk while maximizing savings for client companies seeking devices and solutions.
In other scenarios, third-party leasing or financing options may be sought out by customers due to their competitive rates. Even though third-party rates may be significantly more attractive than in-house manufacturer or dealership rates, they may fall short in terms of flexibility and logistics. Future negotiations may be an uphill battle because third-party entities have less incentive to assist customers in device-related issues or arrangements.
Still, flexibility may be the price most companies agree to pay in return for attractive lease deals or rates. You tend to get what you pay for.
The Best Deal? That Depends
If you’re wondering where you should seek leasing or financing arrangements for your company’s new copiers or printers, the answer depends on several factors.
- How important is flexibility for your company in comparison to cost?
- What type of devices and solutions is your company needing and how many?
- What industry does your company serve?
- Would you prefer that your financing or lease be through a dealership or third-party financial institution?
- Would you prefer a personal/local contact when questions arise? Or are you okay with a “1-800-PAY-MY-BILL”?
Answering these questions and many like it will help your company decide which leasing and financing path makes the most sense.