10 tips for renegotiating and restructuring equipment rentals and loans

If your business cash flow is tight and you need some breathing space, consider reorganizing your equipment rentals and loans. You can always negotiate your existing rental contract. The biggest reason for leasing companies not changing the terms of the contract is because they have never been asked to make changes. If you don't ask, you won't get it.

Here are 10 tips for renegotiating your equipment rentals and loans.

1. If you are paying, please call the rental company. Keep the communication lines clear.

2. Avoid delaying payments. They can be up to 10% of the lease payment. They add up quickly and are cumulative.

3. If assessed, negotiate a late payment penalty. Sometimes the leasing company will forgive them when requested, as long as the delay is paid throughout the lease period is not standard practice.

4. Be proactive, not passive, in the process of restructuring. There is a plan. Make sure your financial statements and tax returns are ready to support your refinancing application. The lender wants to see your most recent year-end tax return and current interim statement, which includes a comparison period for the previous year's results.

5. Discuss the possibility of restructuring payments. Options may include lowering payments by adding months at the end of the financial period. Use long-term information about the life of the device.

6. It is recommended to pay only interest payment options within a few months to survive the tight cash flow period.

7. Deal with the rental company manager or bank official. Instruct the customer service staff to say "We don't build a lease."

8. Understand your contract choices. This means reading the cover of your current rental contract document. If the page is missing, request that they be sent to you.

9. Know what will make your lease default. Often, a default on a lease schedule means that even if you pay on time, all leases from the same financial institution will default. Understanding lease defaults will be very expensive.

10. Refinancing and structure usually require a fee. The fee should be less than 0.5% of the total equipment purchase cost.

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