Lease Is More

Let's Make a Deal

Although it's not apparent at first glance, the company offering the lease financing is often not the same one that's selling the equipment. Generally, the equipment seller will refer you to a leasing company with which it does business. Lahti advises you to get a quote from the leasing firm the company refers you to and then get another quote to judge the competitiveness of the first quote. "Get a second referral from the equipment seller," says Lahti, "or ask a friend or business associate."

If you look for a leasing company on your own, Lahti says, you should understand whether you're talking to a broker, who simply structures deals and gets them financed through any of the leasing companies he or she works with, or a leasing company, which puts its own funds on the line.

There's nothing wrong with using brokers, says Lahti. The situation is analogous to using an insurance broker, who finds the best deal for a client among many insurers and, at least in theory, generates savings in excess of his or her fees. But with brokers, as with many other professionals, the same advice applies: Buyer beware.

Back at Royal Laundry of Texas, business is booming, thanks in part to the expanded capacity. According to the Kensis, the current run rate is now $2.8 million, an increase of more than 500 percent since the couple took over the business.

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This article was originally published in the August 1998 print edition of Entrepreneur with the headline: Lease Is More.

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