Amid traditional banking’s tightening credit conditions, many business equipment vendors and loan brokers are feeling the impact. Recent updates reported in Monitor Daily’s Q2/24 Bank Credit Pulse highlight several key changes among large banks that are affecting—or should we say restricting—access to funding.
Here’s a closer look at these changes and how GFLS, a full-service direct lender, can help vendors and brokers take advantage of opportunities to get more applications approved and businesses forward.
Five Key Changes in Bank Credit Offerings
- Reduced App-Only Offerings
- Impact: 11% of large banks have reduced the dollar value of their app-only offerings.
- Challenge: This reduction means vendors and brokers must now gather more financial information from their customers, adding complexity to an already lengthy and burdensome approval process.
- Increased Time in Business (TIB) Requirements
- Impact: 12% of large banks now require a longer TIB, with some increasing from 2 years to 3 years.
- Challenge: Newer businesses and startups may struggle to meet these stricter criteria, limiting their funding options.
- Higher Minimum Deal Size Thresholds
- Impact: 6% of banks have raised their minimum deal size threshold.
- Challenge: Vendors and brokers may find it difficult to get larger financing deals approved at big banks.
- Stricter Standards for Financial Strength
- Impact: 19% of banks have increased their standards for historical financial strength.
- Challenge: This makes it harder for business owner with past financial challenges to get approved.
- Reduced Broker Business Volume
- Impact: 17% of banks are reducing the volume of broker business they entertain.
- Challenge: Brokers are looking for new funding sources to be a reliable and flexible partner.
How Global Financial & Leasing Services Partner with Equipment Vendors and Brokers
With these key changes in bank credit offerings, vendors and brokers need alternative funding solutions. Here’s how GFLS opens new opportunities:
- Flexible Funding Options: Unlike the tightening bank standards, GFLS offers more flexible terms that can accommodate a wider range of business needs. As a nationwide lender, we provide equipment-based financing and supply fast, flexible equipment financing to non-investment grade companies—often in days, not weeks. With an average origination of over $180,000 this year and the ability to fund up to a million, we are well-positioned to compete for larger deals that big banks might now turn away.
- Tailored Solutions: We look at each transaction differently, tailoring solutions best suited to the applicant. Our approval process is handled by a direct decision maker and is based primarily on the applicant’s ability to service their current and proposed debt.
- Direct Lending with Own Capital: As a direct lender using our own capital, GFLS can offer the flexibility and speed that traditional lending institutions often lack. This makes us an ideal partner for business owners who struggle with equipment financing approval from traditional lending institutions.
Learn more: How Vendor Financing Can Support Your Sales Team
Proven Opportunities with a Proven, Trusted Direct Lender
The GFLS team has been building relationships with brokers, proving the growing need for flexible funding sources. We’re seeing more vendors and brokers seeking partners who can provide the support and flexibility they require to better support their customers’ equipment financing needs. Our team is focusing on this shift, asking vendors and brokers important questions about their current funding challenges:
- Are you experiencing more turned-down opportunities?
- How is the requirement for additional financial information affecting your business?
- Are you aware of how GFLS can help fill the gaps left by traditional banks?
By offering tailored financing solutions, GFLS is ready to help vendors and brokers thrive in this changing credit environment. Bring your financing applicants to us and let’s grow and support business. Get in touch with us.
