A common question asked by our customers is “what’s the difference between renting is and leasing foodservice equipment?” So we have created this small guide explaining the difference between the two, and outlining the advantages and limitations of both, to provide reassurance to our customers that they have chosen the best payment option for them and their business.
What is leasing and renting?
In simple terms, renting is a short-term agreement between at least two parties, where one party allows temporary use of an asset to the other party, with only the one condition being a return of regular payments. In comparison leasing is known to be an outlining agreement with multiple conditions between a leasor and leasee.
Benefits and limitations of renting and leasing
Most importantly, leasing requires “balance sheet” lending which, in simple terms, means activity including your repayments are analysed when you are applying for further finance. So, if you have any plans to expand your business in the future, this is important to take into consideration, as a poor leasing transaction can limit your opportunities. In comparison, rental is classed as an “off-balance sheet”, so if you are looking for loans in the future, the equipment you rent will have no impact on this.
If you lease equipment you are usually covered by the manufactures warranty. On average usually, this can be anything from 12-36 months. With a rental you get a great advantage of a lifetime of rental service guarantee. So, you can relax, by knowing you are covered until you return or decide to buy your equipment outright if you choose to.
A strong factor to consider when choosing to opt for lease or rental of equipment is credit checks. With a rental, you can get a near-instant credit result, in some cases less than 1 hour after your application. This is due to the decision to whether we will rent you our equipment being made in-house which is highly based on the credit check result. Therefore, it’s the perfect option for those who need equipment ASAP. Even if you have a poor credit history, we still have rental options available to you.
In contrast, with leasing you could be waiting for more than 24 hours for a result, as other factors may be considered. Whilst this may slow your process down, it could be perfect for those who undertake a thorough decision-making process. Unfortunately, there is a risk that lots of things can change in 24 hours, particularly around the availability of equipment.
If you decide on leasing equipment, it means you may need to give a personal guarantee, which is a signed legal agreement to honour the terms of the leasing agreement, while renting can often be simpler, with fewer agreements and guarantees to sign, although there may be further checks such as ensuring we can install your equipment safely.
Finally, as we’re your only point of contact, arranging a rental agreement couldn’t be easier, while leasing can mean dealing with a broker who may then have to contact a lender. Chances are you could be waiting longer to hear back regarding any information you need to provide or answers you are looking for.
In conclusion, while rental and lease may seem very similar on the surface, there are important differences that need to be understood before making a commitment to foodservice equipment goods.
Always remember if you are picking a leasing option, that you have mapped out the capabilities of your business and overall objectives to limit the risk leasing a product has on your future growth/ decisions. Renting is a great alternative and in many cases can be a more straightforward and quicker solution.
Marketing Assistant Jess is a recent post -graduate student who is experienced in digital marketing and strategy development. She is thrilled to be working with Foodservice Equipment Rental and PKL, due to their core focus on customer service and product quality.