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November Is the Month for Giving Thanks

by Company News

Global Financial Leasing Services
Has Much to be Grateful ForGlobal Financial Resources

The Global Financial & Leasing Services (GFLS) team hopes you had a remarkable Thanksgiving. Like so many do during November, our team reflected on the many things we have to be grateful for this year.

Measurable Growth

2018 has been a time of measurable growth for both GFLS and our clients. To help meet demand and continue providing the personal level of service our clients deserve and expect, we hired three new team members. These focused and motivated people have joined our operations and our sales departments. We brought them on board to help with back-end responsibilities and sales support. Their work ethic makes each of them an excellent fit for our existing team who put 100 percent toward helping our clients obtain the equipment financing they need. Our newest team members allow us to streamline processes and keep response time quick.

The need to hire additional staff indicates that our clients’ businesses are growing too, or else we wouldn’t be seeing the demand for equipment essential to expanding business – a win/win for all.

We are deeply grateful for the new customers who’ve turned to us this year to help them finance and lease equipment. So far this year, our number of customers has increased 100 percent over this same time period of 2017. And, we’re even more thankful to our current customers who have referred new clients to GFLS because we work hard every day to earn their respect and trust.

Along with new customers, we have been fortunate to begin partnerships with new brokers – 25 percent more new brokerage relationships over 2017 to be exact. The support GFLS has seen from the broker community is humbling.

Celebrating 10 Years in Business

Last, but not least, we are grateful to be coming on the tail end of celebrating our tenth year in business. It’s a well-known fact that many businesses do not survive past their fifth year. GFLS has surpassed the norm by twice that. Fortunately, there is no end, but instead more growth in sight. This is an extraordinary accomplishment for any business, especially one like ours that Jim “JD” Jenks founded during the Great Recession in 2009.

As we prepare for the end of 2018 and the start of our next decade, our philosophy that business owners are more than numbers on paper is always top of mind. We’ll continue to take character and other factors into consideration for our clients who need equipment lease financing. After all, the many things for which are grateful wouldn’t be possible if not for our clients. For that, we are grateful and blessed.

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Why Put Profit Above an Equipment Lease Payment?

by Financing

When “Scary” Payments Aren’t So ScaryPut Profit Above an Equipment Lease Payment

If you have been putting off leasing equipment for your business because of your less-than-perfect credit score and fear of a “scary” lease payment, stop. You may be stunting business growth for no good reason. Even if you fall in the B or C credit tier, there is much more to the equation than your equipment finance rate and monthly payments.

In fact, we’re going so far as to say that if the equipment you finance is essential to your business and will generate profit then the finance rate shouldn’t affect your decision to lease. You already know whether new or upgraded equipment is essential to your business. Determining if it will generate revenue (and how much) is a matter of analyzing the numbers.

The best way to illustrate that what you stand to gain is more important than what you spend on a payment is by example.

You have your eye on a piece of equipment that you can invoice $100 per hour in use. Based on competitive research, a conservative estimate of use per week is 30 hours.

$100 x 30 hours = $3,000 in billing per week

$3,000 x 4 weeks in a month = $12,000 in billing per month

Of course, operating and labor costs have to be factored in, and you’ll want to be generous in estimating these. For our example, we’ll use $45 per hour.

$45 x 30 hours = $1,350 in expenses per week

$1,350 x 4 weeks in a month = $5,400 in expenses per month

 

$12,000 in billing per month – $5,400 in expenses per month = $6,600 PROFIT

 

Now, let’s look at the equipment lease payment.

Falling in the B or C credit tier, your rate, and therefore payment, will be higher than a rate based on a better credit, which is a reason to improve your personal and business credit score. However, your credit score is what it is for the time being. Your rate and monthly payment will reflect that.

$6,600 monthly PROFIT – $1,200 per month payment = $5,400 per month PROFIT

With a better credit rating, the payment might fall in the $700 range

$6,600 monthly PROFIT – $700 per month payment = $5,900 per month PROFIT

Do you want to spend more on a monthly payment because of less-than-perfect credit? Of course not. But can your business growth afford to be stunted because of it? Usually not. Even paying a higher rate due to poor credit, you’re still generating an extra $5,400 a month profit. And, every month you make your equipment lease payment on time, you’re improving your credit score. The next time you lease equipment you’ll be better positioned to earn a lower rate. Last, but not least, there are many other benefits to consider when leasing equipment that outweigh the expense of the lease payments.

When Other Lenders Say No, We Often Say Yes

Global Financial & Leasing Services (GFLS) strives to approve equipment leases regardless of your credit score. We work with business owners across many industries, such as health/medical, construction, restaurant, machinery/manufacturing, printing, logging/forestry and many others. Our team listens to your story and business goals. We help you run realistic numbers to determine whether leasing equipment with what may seem like “scary” higher rate makes sense for your situation and growth rate.

For an objective look at what’s possible, talk to us.

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How to Improve Your Personal Credit Before Financing Business Equipment

by Financing

Show You’re More Than an ApplicationImprove Personal Credit Score

When you own a small business and its growth depends on financing an equipment lease, your personal credit matters. It matters even if your company’s credit history is blemish free. Equipment lease financiers draw a correlation between your personal and business money habits. In other words, people are likely to treat their business accounts much like they do their personal accounts.

Equipment lease financiers review more than your financing application, including your personal credit history. If you’re a new business owner, your personal credit plays a larger role in your application because your business hasn’t had time to establish a history. There is a saying: Past behavior is the best predictor of future behavior. Your past credit history serves as a crystal ball for creditors determining the odds of getting their money back. 

After the Great Recession, small business owners’ credit history is under even more scrutiny than ever. Ironically, the recession is one reason some personal credit histories have blemishes. Before applying for financing to lease equipment essential to your business, everything you do to improve your personal credit is time and effort well spent.   

Start Improving Your Personal Credit

  • Order a credit report and verify that the information it contains is accurate. It’s common for credit reports to have errors whether they be from inaccurate reporting to someone else’s information being mistakenly added to yours.
  • Don’t miss any payments or have insufficient fund notices on any account for three to six months preceding your equipment lease financing application.
  • Unless absolutely necessary, do not apply for new loans or open new credit accounts in the months prior to financing an equipment lease.
  • Rather than close accounts, pay off the balances. Keeping an account open improves credit age. The longer accounts are open, the better.
  • If possible, pay off delinquent balances that have landed in collections. Contact the creditor and request a stop to collections in exchange for full payment.
  • Make small purchases and pay the balance off fully every month.
  • Remember that just because you have a credit limit, it doesn’t mean you should max out that limit. Keep credit balances in check with your income. A good rule of thumb is to keep the amount you owe less than 30 percent of your income.
  • Slow and steady wins the race. Improving your credit score takes time, but it can and will happen if you stick to your plan.

Show There Is More to You Than Your Equipment Lease Financing Application

The goal is to highlight your fortitude in facing and conquering challenges. If your credit history isn’t as high as you’d like it to be, show the lender more positive aspects of your financial performance history. Examples such as long periods of positive cash flow, how much your business sells each month, how quickly you were able to turn a profit, how well you have managed expenses, and testimonials from long-time, loyal customers, etc. demonstrate positive aspects of your financial performance history.

Work with a direct lender, like Global Financial & Leasing Services (GFLS), who is willing to see you as more than numbers and an application because those things don’t always portray character and integrity. If you have imperfect credit or a startup, we listen to your whole story and strive to work with you on getting the equipment you need to succeed.

If your credit history is putting your business’s future on hold, work on improving your personal credit and talk to GFLS about your equipment leasing needs.

 

When Other Lenders Say No, We Often Say Yes

Still get financing with low FICO Score

Grow Your Business Despite Low FICO

by Financing

A Low FICO Score Didn’t Keep Ayala Bobcat Service from Financing Essential Equipment to Grow Sales

Chris Ayala and his father joined forces to start a ground clearing business in 2014. Drawing on that Still get financing with low FICO Scoreexperience, Chris set out on his own as a sole proprietor and started Ayala Bobcat Service in 2016. His company, located in San Antonio, Texas, specializes in landscaping, ground clearing and excavating. In just two short years, Chris has cultivated and strengthened business relationships with landowners, homeowners’ associations, and real estate agents and developers. Having such a diverse client base results in a steady stream of landscaping and ground clearing projects.

The Need for Equipment

In Chris’s line of work, projects don’t get done without a compact track loader. Renting this equipment was costing Ayala Bobcat Service $3,000 per month. Chris could get the equipment his business needs to grow and gain measurable cost savings by financing an equipment lease versus renting.

Chris located a used Caterpillar compact truck loader for lease at a local San Antonio equipment company. Not only did the machine meet all of Chris’s requirements, such as horsepower, high-flow hydraulics, oil cooler, and two speeds, it was priced at $48,500, which is well below current market price. An evaluation valued the CAT 299 at $58,150 at auction and $66,141 retail.

Between the CAT 299’s features and attractive price point, Chris knew it would sell quickly. He had to move even quicker.

Overcoming a Low FICO Score to Secure Equipment Financing

In the eyes of big banks and traditional lenders, financing equipment for Ayala Bobcat Service represented risk. Chris is a sole proprietor without big, corporate assets and his FICO score wasn’t perfect. In fact, it was low.

Global Financial & Leasing Services (GFLS) looks beyond what numbers on a financing application. We spoke to Chris after reviewing his application and learned more about his loyal customers, the demand for his services, the outstanding deal he’d found on the CAT 299, and that he was a homeowner with deep roots in his San Antonio community. The compact track loader’s vendor signed a remarketing agreement, so Chris would have help selling the equipment when it goes off-lease at the end of the term. Chris could then use those funds to finance another compact track loader if he chooses.

Yes, Chris’s credit report had a collection blemish, which lowered his FICO score, but all other accounts were paid as agreed.

We worked diligently with Chris to ensure Ayala Bobcat Service had the equipment required to succeed. And, we did it quickly so that Chris didn’t miss out on the perfect compact track loader for his business. If other lenders have said no to financing equipment that is essential to your sales and growth, GFLS can often say yes, so tell us about your financing needs.

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What To Do When The Lender Says No

by Financing

When Other Lenders Say No to Equipment Financing, Global Financial & Leasing Services Can Often Say Yes

There are a number of differences between Global Financial & Leasing Services (GFLS) and other financial lenders. They range from our simplified application process and level of personal customer service to the very people who are able to secure equipment financing through us.

These differences are in GFLS’s DNA. It goes back to the year in which our company was founded, 2009. The biggest financial recession the U.S. had experienced since the Great Depression had taken hold and lenders responded by tightening financing requirements. Small and mid-sized business owners with less than perfect credit were left with few lending options available to them. The financial crisis hit all businesses hard, but small companies took the brunt. Struggling to get access to credit, according to the Bureau of Labor Statistics, small businesses represented 60 percent of the total job losses in the private sector between 2008 and 2009.

GFLS, like any new business planning for success, opened its doors to fill a need in the marketplace. In order to survive, much less grow, during the Great Recession, business owners had to have access to flexible financing for essential equipment. They needed a lender willing to look beyond credit blemishes. GFLS was created to serve as that much-needed alternative to big bank financing.

We Help Grow Businesses

Traditional lenders such as banks historically viewed small business equipment financing with a more critical eye than they did larger businesses. But, considering the job creating engines small businesses are in our economy, they deserved a lender that would champion their growth. GFLS wanted to become that champion, so we focused on helping small business owners with equipment financing to grow their companies and create jobs.

We Peel Back the Layers of Your Equipment Financing Application Like an Onion

You are more than what is on your financing application. If you have B- or C-tier credit or have a startup company, we listen to you and get the whole picture to help get you the capital you need. Beyond numbers and credit scores, we believe in character. Regardless of credit score, we treat every applicant with respect and kindness.

GFLS Opens Direct Lines of Communication with You

The entire equipment financing process is transparent. There is no rubber stamping and no automatic denials. Once the application is set in motion, we’re in constant communication with you. You receive daily updates on your financing application status, and more importantly, you can speak directly to decision makers. GFLS was founded to be different, and communication is one of our most appreciated differentiators from big banks that give applicants the run around and a frustrating game of phone tag.

Working with a Direct Lender Matters

Since GFLS is a direct lender, we are able to approve credit with our in-house funds, and the typical turnaround time is two to 24 hours, not days, weeks or months. The ability for small and mid-sized businesses to move quickly is one of their most competitive advantages in the marketplace. Our equipment financing services move at that same pace.

Don’t let big banks have the final say on your creditworthiness just because your financing application doesn’t fit their magical algorithms. Despite the economy’s rebound, banks are slow to return to the level of funding for small businesses that preceded the Great Recession. When other lenders say no to financing equipment that is essential to your sales and growth, GFLS can often say yes, so tell us about your financing needs.

When to Prepare for Annual Property Taxes?

by What about Taxes?

Don’t Wait Until the End of the Year to Prepare for Annual Property Taxes on Leased Equipment

Let’s start at the beginning for those new to leasing equipment. Property taxes are owed on leased equipment. In most states, property taxes are due by December 31, though there are a few exceptions depending on where your business is located.

Since the equipment is leased through GFLS Services, your equipment financing provider, we retain title of ownership and we are responsible for reporting all equipment to your local taxing jurisdictions, as well as ensuring the property taxes are paid on time. Once we receive the tax bill on your leased equipment, our team sends a copy to you, the lessee, along with a notice that the tax amount will be deducted from your bank account.

Simply put, we receive and pay the tax bill, in turn you’ll pay GFLS Services back through an ACH (debit transfer) from your bank.

Nobody likes end-of-the-year tax surprises, so the GFLS Services team not only includes detailed information about leased equipment property taxes in lease agreements, but also verbally reviews it with you so you know exactly what to expect. Even though tax bills vary from state to state, once you receive the notice about your first one, we recommend you record that date to keep in mind for future financial planning.

The Legality and Benefits of Your Equipment Financing Provider Managing the Property Taxes

Legally, it is GFLS Services’ responsibility to pay the property tax bills on equipment owned by us, but leased to our clients. We take that responsibility seriously and always pay on time.

But doing so also means additional benefits for the lessee. It is one less bill for you to track a payment date. And, it could give you a little financial wiggle room. Initially, the property tax payment comes directly out of our pocket. Since we pay the bill first, this gives you a few days cushion which makes a big difference for businesses dealing with slow accounts receivables or strained cash flow. Unlike taxing jurisdictions, we’re able to set up monthly payment plans with our clients to cover property taxes, which can help with budgeting and minimize larger outlays at once.

Isn’t Property Tax Planning for Leased Equipment an Issue for the Accountant?

Absolutely. We highly encourage our clients to consult their accountants for advice and assistance with their company’s financial matters. However, we believe in education, too, to help business owners become more knowledgeable.

The GFLS Services team manually sets up, processes and posts all property tax accounts and bills. Since we lease equipment across the country, this is a time-consuming process. However, this saves you money since you are not paying your accountant to do so as you’d likely do if you owned, rather than leased, the equipment.

Any time you have a question about planning for or paying property taxes on your leased equipment, give us a call at (480) 478-7400. We’re always happy to review the process and answer your questions.

Can You Imagine a Big Bank Calling YOU to Defer Your Equipment Lease Payments After a Disaster?

by Company NewsFinancing

Global Financial & Leasing Services’ Clients Can

 

As we’re writing this blog, it’s hurricane season. Right now, millions of people in the southeast are keeping an eye on several storms moving across the Pacific Ocean. Many of these people are small or mid-size business owners. Many more people depend on these companies for their livelihoods. Should one or more of these storms develop in to full-fledged hurricanes, like Hurricanes Harvey and Irma in 2017, damage easily runs into the billions. For small to medium-sized businesses, hurricanes not only cause physical damage to structures and equipment, but also forces their owners and employees to face the hardships of rebuilding and reopening the doors.

While business owners keep an eye on approaching storms, who’s keeping an eye out for their best interests when a hurricane makes landfall? Their equipment financing provider is the least expected answer. However, that’s exactly what happened last year after Harvey and Irma tracked devastating paths in the south and southeast.

It’s not a common occurrence for most equipment financing customers to receive a payment deferral on equipment leases after a disaster. Usually a customer would have to contact their lender/lessor and request a payment deferral due to a tragedy. What’s special about working with a personal service-focused equipment-financing provider, like Global Financial & Leasing Services (GFLS), is that they will often reach out to their customers adversely affected and address their needs.

GFLS president, Judi Jenks, explains, “As a small business, we respond quickly because we don’t have to go through layers upon layers of decision makers. Our management team watched the news footage of Hurricanes Harvey and Irma, and we wanted to help in a way that made a fast, positive impact on our clients. We did a search of our database for lessees in the affected areas and automatically applied the payment deferral. Then, I personally called each one to let them know they had one less thing to worry about.”

The difference between obtaining financing for essential business equipment from a “big bank” and a smaller equipment financing provider was never so evident than it was for a GFLS Services’ client in Florida. He had lived in the Sunshine State all his life, yet Hurricane Irma was the first time he had to deal with insurance companies.

Judi recalls, “This client lost the roof off his personal residence among other damage. That alone was a nightmare situation. When I called him to tell him about the equipment financing deferral, he was simply ecstatic over what we had done and was so appreciative. It was the least we could do given the circumstances, but took a burden off his shoulders while he began to get life back to normal.”

It’s heartbreaking to watch coverage of cities being battered by waves, rain and wind. What people tend to forget is that along with damage to homes and city infrastructure, business owners are facing the same problems on two fronts – home and business.

“Even though GFLS Services is located in Scottsdale, Arizona, we’re still looking out for our equipment financing clients across the country. We always encourage our clients to call us at (480) 478-7400 and ask to speak directly to me or Rachelle, our operations manager, should they be dealing with a disaster and need help,” says Judi.

5 Reasons Startups Turn to Global Financing & Leasing Services for Equipment Financing

by FinancingStartups

And Not the Big Banks

You, Google, Apple, Hewlett Packard, and Microsoft have something in common. No matter what your business or industry, you are a startup, just like they were. They had a disruptive idea, and you have an idea on which you can build an empire – even if your idea of an empire is to create a sustainable, profitable business in your community.

Big banks love Google, Apple, Hewlett Packard, and Microsoft. However, they aren’t fond of startups for various reasons. Link to blog above. For example, Steve Jobs and Steve Wozniak didn’t finance equipment for their new startup, Apple. A bank turned them down for a mere $15,000 loan. A computer parts store turned down an equity stake in Apple in exchange for the $15,000. The two men ended up working out purchase order financing.

We love startups because we believe they turn into small businesses that drive the American economy. More people are employed by small businesses that began as startups than global corporations employ. As a startup owner, you have ability to produce jobs in your community, which is good for everyone.

To give startups alternative equipment financing options is the reason why Global Financing & Leasing Services was founded in 2009 after the Great Recession and big banks tightened their lending to startups even more.

Rather than evaluating potential based on paperwork and applications, we go about it differently in five important ways.

  1. We look at what you DO, not just the numbers and risk behind it.
  2. We assess your equipment financing application as a whole, including you, your financial plan, reserved funds, etc. instead of denying financing based on one single aspect.
  3. We offer competitive rates for startups.
  4. We’re a small business helping other small businesses, lending $25,000 – $500,000, which is the typical range of equipment financing.
  5. We approve equipment financing faster because we are a direct funder without all the red tape that many other financial institutions have.

More importantly, we know our clients as more than a file number. You speak to decision makers and talk about your needs, which simply isn’t possible with big bank financing applications.

Apple was valued at $5,309 in 1977. In December of 1980 it went public for $1.79 billion, and the rest is history. Jobs and Wozniak would fail miserably today because big banks won’t lend to a startup on a purchase order alone. Big banks want two or three years of business history and documentation. And even if they did finance equipment for a startup, it would never happen in less than 90 days. Jobs and Wozniak would’ve lost their contract for their first order by then.

Maybe your startup is the next Apple in the world or your community. Maybe we’re the company who can finance the equipment to make that happen. Contact us to see what’s possible.

Why Is It So Hard for Startups to Get Financing?

by FinancingStartups

It’s Not You, It’s the Big Banks… Well, and a Little Bit You

Startups are caught in a notorious Catch-22. Your business is starting out and needs financing to obtain the equipment required for it to grow. However, your business can’t grow without the financing it takes to get that equipment, and big banks want proof and a long track record of growth before financing your equipment lease.

It’s not you that makes big banks fearful of funding. Prior to the Great Recession in 2008, a river of financing for startups flowed freely. Post-Great Recession, big banks decreased the number of loans to startups and small businesses for a few reasons, including less demand for them, stricter financing regulations, and higher expenses associated with servicing the financing, which cut into bank profits.

As a result, startups can suffer through years of early growing pains that last longer than necessary while their owners work hard on two fronts: getting the startup off the ground and positioning it to be attractive to banks that can finance the equipment needed for next-stage growth.

Startups Often Fall Short in the Things Big Banks Want in a Financing Customer

If you’ve tried to finance equipment for your startup through traditional big bank channels and failed, you may or may not have been given the reason why. Chances are it’s because of one or more of the following:

  • Bad credit history and poor credit score
  • Weak or unstable cash flow
  • Fewer than two to three years in business
  • Limited collateral to back a loan should it go into default
  • Absence of basic business documents, such as a business plan, financials and projections, credit reports, bank statements and tax returns, and copies of articles of incorporation, business license, contract, leases, etc.
  • Factors out of your control, like market conditions, local competition, local, state or federal regulations, and economic trends

Financing and Leasing Options When Your Startup is More Than Meets the Big Bank’s Eye

The average loan amount for a startup is less than $500,000. For big banks, that amount is not worth their while. Fortunately, there are options for startups that need funding for leasing equipment, yet lack what’s most attractive to big banks. Micro loans, crowd sourcing, and such have cropped up as alternative financing sources to the big banks.

Also, startup owners can use these early years to improve their credit scores, prove financial stability and business leadership skills, build collateral, and get their business documentation in order – all of which are smart plays to ensure your company’s sustainability and longevity whether you intend on eventually financing equipment leases through big banks or not.

Seek out equipment financing providers, like Global Financing & Leasing Services, who work specifically with startup owners facing challenges with traditional financing. We’re a private company that doesn’t answer to and are not accountable for shareholders’ profits like big banks are. We were founded in 2009 to serve small- to mid-sized businesses and startups that are shut out of traditional financing markets due to the reasons listed above. We look at more than what’s on or not on the application. We look at YOU and match equipment financing options to match your goals. More importantly, equipment leasing options that will work for you, regardless of what credit tier you find yourself.

If you’re ready to explore equipment financing options that can help your business go from startup to enterprise faster, then we should talk. Or, learn more about why startups choose Global Financing & Leasing Services to finance equipment essential to their growth.

What are Capital Leases?

by Benefits of Leasing

Understanding Capital Leases

We previously discussed Fair Market Value leases.  Today let’s talk about Capital Leases.

Capital leases also are known as buck-out leases, dollar buyout leases, lease purchases, finance leases, and nominal leases. Unlike Fair Market Value (FMV) leases, purchasing the equipment at the lease’s end is not optional. You do purchase the equipment, and the price you will pay for it is determined at the start of the capital lease. This price can be as low as $1.00, thus the buck-out alternative name.

Is a Capital Lease a Loan or a Lease?

Unlike FMV leases, you own the equipment during the lease, which means you can depreciate it and take advantage of certain tax incentives. According to the Financial Accounting Standards Board, to be considered a capital lease, it must meet a minimum of one of the following:

  • The lease transfers ownership of the property to the lessee by the end of the lease term
  • The lease contains a bargain purchase option
  • The lease term is equivalent to 75 percent or more of the estimated economic life of the leased equipment
  • The present value at the beginning of the lease term of the minimum lease payments equals or exceeds 90 percent of the excess of the fair value of the leased equipment

For Which Types of Businesses are Capital Leases Ideal?

Since you own the equipment while you make monthly capital lease payments, the equipment does reflect on your balance sheet. However, it might be an ideal option if you want to reserve your cash. Capital leases might be the ideal choice for equipment that has longevity and little depreciation or chance of obsolescence.

Talking with your accountant and Global Financial & Leasing Services can help point you in the right direction of a lease that fits your goals and financial situation.  Contact us today to learn more.