For Leasing Companies, Surety Can Help Fuel Growth With Little Added Cost

Today, many leasing companies have several good deals they’ve already vetted – but for one reason or another haven’t completed. This is slowing the ability of leasing companies to accelerate their growth.

Meanwhile, even as the U.S. economic recovery continues, many lending institutions remain cautious about extending credit lines. Yet, by requiring prospective lessees to obtain a specialized surety bond, known as an equipment lease payment bond, leasing firms quickly find they can close more deals.

Let’s look at this from the lenders’ perspective. When lenders evaluate leasing firms for credit line increases, they typically assess the security of their lease portfolios. By reducing the risk of their portfolios leasing companies may qualify for higher credit lines, enabling them to grow faster. Investors are also more interested in joint-venturing with, or directly investing in, a smart equipment lending firm that has protected a portion of its risk portfolio and figured out a solution to growing its business with little or no additional direct cost.

So, regardless of the industries they serve or products they lease, many leasing companies now require more lease applicants to obtain an equipment lease payment bond from a highly rated surety company in order to obtain a lease. This gives leasing companies at least four key advantages:

1. Sureties routinely perform extensive due diligence on bonding applicants, giving the leasing company the benefit of another level of financial scrutiny of any potential lessee.

2. A surety backs the ability of the lessee to make the lease payments through the lease term.

3. The surety guarantees payments will be made in accordance with the lease contract by issuing a performance bond to the leasing company.

4. In the event of a pending default, the surety often steps in and helps the lessor and lessee work through a myriad of issues in the interest of maintaining the lease.

Unique Surety and Insurance Services helps leasing companies in many industries accelerate their growth by increasing their bond-backed leases. Call us today at (561) 429-3600 ext. 1001 to find out how using equipment lease payment bonds can be a win-win for you and your lessees. We’ll also show you proven ways to make this process easy and efficient for your lease applicants.