Posts in category: Business Advice

In the last decade, the financial world has undergone a seismic shift, thanks to digital technology and fintech innovations. These changes have brought about easier access to financial services, improved efficiency and heightened security. Additionally, there’s been a notable increase in regulatory oversight, aiming for more transparency and better consumer protection. The rise of cryptocurrencies and advancements in AI and machine learning are reshaping investment strategies and risk management.

Despite these changes, equipment financing remains essential for companies aiming to start, grow, and innovate. This sector is evolving rapidly, influenced by technological advancements and changing economic priorities. For business owners, especially those with less-than-perfect credit, understanding these shifts is crucial for growth and seizing new opportunities.

Global Financial & Leasing Services (GFLS) Opens Doors for All Businesses

GFLS is at the forefront of ensuring that all businesses, including those traditionally hindered by credit blemishes, can benefit from these industry changes. By focusing on the unique needs of diverse businesses, GFLS can be your partner in accessing and maximizing the benefits of equipment financing. Our team can show you how equipment financing is more than just a way to fund business equipment—it’s a tool for achieving your business’s full potential.

The Blend of AI and Human Insight in Decision Making

The integration of AI in financial services has revolutionized how decisions are made, especially in credit assessment and risk analysis. However, in equipment financing, where every business owner’s story is important, the human touch is still vital.

GFLS exemplifies this blend of technology and human understanding. We consider your story beyond just a credit score. This approach is especially valuable for business owners with challenging credit histories, as it offers a more comprehensive view of their financial situation.

Key Trends Shaping Equipment Financing

1. Digital Transformation: The move towards digital platforms and mobile applications is streamlining the application process, leading to quicker decisions and more transparency.
2. Redefining Creditworthiness: Alternative and “story” lenders, like GFLS, are increasingly evaluating the overall health and potential of businesses, not just their credit scores. This shift opens opportunities for businesses with past financial challenges but strong business models and growth potential.
3. Diverse Financing Options: The market is moving towards more flexible and personalized financing solutions, including leasing, pay-per-use models, and subscription-based financing.

Future Projections in Equipment Financing

1. Blockchain and Smart Contracts: Blockchain technology will likely have a significant impact on equipment financing, streamlining transactions and contract management.
2. Sustainability-Focused Financing: As environmental awareness grows, financing solutions that prioritize eco-friendly equipment will become more prominent.
3. Customized Financial Solutions: The trend towards personalized financing will continue, offering solutions more aligned with individual business needs.

Navigating the Future: Tips for Business Owners

As a leader in equipment financing, our team is encouraging business owners to:

• Embrace New Technologies: Adopt digital financing tools for efficiency but maintain personal relationships, especially with vendors and financial services partners, for tailored solutions.
• Craft a Compelling Business Narrative: Your business story is vital in financing decisions for story lenders, like us. Highlight your business model, growth potential and the role of the equipment in your success.

Related Reading: How to Create a Strong Equipment Financing Application

• Explore Various Financing Models: Be open to different financing options and understand how each aligns with your business strategy.

Looking Ahead: Equipment Financing’s Evolving Role

As equipment financing continues to transform, companies like GFLS, which prioritize understanding an applicant’s unique story, are leading the charge. For business owners, staying informed and adaptable is key to effectively using equipment financing for growth and success. In this new era, equipment financing is not just a financial tool—it’s a strategic asset that fosters innovation and growth.

GFLS is an established direct lender with the unique ability to finance almost any business seeking to acquire equipment. We have been providing equipment financing solutions since 2009 and have the ability to help business owners and startups who have been turned down by the banks. If you have any questions, please get in touch.

Securing equipment financing is a critical step for many business owners who want to expand, innovate or simply maintain their operations. However, obtaining that equipment financing can be difficult, especially if you’re a startup or have less-than-perfect credit.

Global Financial & Leasing Services (GFLS) is an alternative lender and our application process takes more than your credit score into account. No matter who you go through for equipment financing, you should always have a well-thought-out application ready that clearly communicates your needs, as well as and the benefits to the lender.

Here are a few pointers to create strong equipment financing proposal, including practical tips, essential elements to add and common pitfalls to avoid.

The Dos and Don’ts of Completing an Equipment Financing Application

The Dos

1. Clearly Define Your Objectives: Start by clearly explaining why you need the equipment financing. What equipment are you looking to acquire, and how will it benefit your business? Be specific about how the equipment will contribute to your operations, enhance productivity or generate revenue.

2. Provide a Detailed Cost Analysis: Lay out the financial specifics. Include the cost of the equipment, any associated implementation or training costs, and the expected return on investment (ROI). Being transparent about the numbers demonstrates financial literacy and helps build trust with the lender.
3. Showcase Your Business’s Strengths: Use the application as an opportunity to highlight the strengths of your business. This could be your market position, your experienced team or your solid track record of revenue generation. Make it clear why your business is a safe and promising investment. Don’t ignore this section, even if you have less-than-perfect credit. Your story matters when working with an alternative lender, like GFLS.
4. Demonstrate Repayment Capability: Lenders want to know that you can repay the loan. Provide comprehensive financial statements, cash flow projections and any other relevant financial information to demonstrate your business’s financial stability and repayment capability.
5. Develop a Risk Mitigation Plan: Don’t forget to acknowledge potential risks. Do demonstrate that you have a plan to mitigate them. This could be market fluctuations, changes in technology or other industry-specific challenges. Showing that you have considered and planned for potential risks is a sign of a well-managed business.
6. Communicate Effectively: Clarity is key. Ensure that your proposal is well-written, concise and free of industry jargon. Use clear headings and bullet points to make the document easy to navigate. Remember, the goal is to make it as easy as possible for the lender to understand your proposal and see the potential benefits.

The Don’ts

1. Don’t Overcomplicate: Keep your proposal straightforward and to the point. Avoid the temptation to include unnecessary information that could distract from the main message.

2. Don’t Underestimate the Importance of Presentation: First impressions matter. Ensure that your proposal is professionally presented, with no typos or grammatical errors. Use a clean, professional format and high-quality printing if submitting a hard copy.
3. Don’t Be Vague: Vagueness can be a red flag for lenders. Be specific about your needs, your plans for the equipment and how you intend to repay the loan.
4. Don’t Forget to Follow Up: Once you have submitted your proposal, don’t just wait for a response. Follow up with the lender to express your continued interest and offer to provide any additional information they might need. Keep in mind traditional lenders can take months to review and approve or deny your application. Our team reviews equipment financing applications and makes decisions in days versus weeks or months.
5. Avoid Unrealistic Projections: While it’s important to showcase your business’s potential, avoid overly optimistic or unrealistic financial projections. Ensure that all claims are backed up with data and that your projections are based on reality.
6. Don’t Neglect the Terms and Conditions: Be sure to thoroughly review and understand the terms and conditions of the financing agreement. Pay attention to the interest rates, repayment terms and any other obligations. Ensure that you are comfortable with the terms before proceeding. Don’t hesitate to ask questions if you’re unsure.

By following these practical tips and best practices, you can build a compelling case that showcases your business’s potential and demonstrates your ability to take on equipment financing.

Remember that preparation, transparency and effective communication are key. With a well-crafted application, you are one step closer to obtaining financing solutions that will support your business’s success. Global Financial & Leasing Services is here to guide you through the process, providing the support and expertise you want to get the equipment financing you need.

Small and medium-sized businesses (SMBs) rely on equipment to operate efficiently and profitably. Whether it’s for manufacturing, construction, healthcare, logging or forestry, restaurant, or printing, having the right tools and machinery is essential for your business to meet customer demand and grow. However, purchasing this equipment can require a significant investment, which can create a difficult situation for startups or businesses with limited capital and for SMB owners with blemishes on their credit reports. Equipment financing provides a workable solution to this problem by allowing business owners to spread the cost of their equipment purchases over time.

What is Equipment Financing?

Equipment financing is a type of loan that businesses use to purchase equipment. The loan amount is typically based on the equipment’s value, and the equipment serves as collateral for the loan. The lender retains ownership of the equipment until the loan is paid in full, and if the borrower defaults on the loan, the lender has the right to repossess the equipment. In other words, equipment financing works in the business world just as it does on the consumer side, say for purchasing homes and cars.

Equipment financing can be beneficial for a business owner because it allows you to acquire the equipment you need without having to pay for it upfront. It also helps business owners manage cash flow by spreading the payments over time, letting you to use your cash reserves for other business expenses. And, of course ideally, the profits gained from additional business gained or products or services sold from having the equipment more than covers the equipment financing payment.

Three Most Common Types of Equipment Financing

There are three common types of equipment financing available to SMBs, more times than not, one will fit your business, budget and needs.

1. Equipment Leasing

Equipment leasing is a popular option for business owners who need equipment, but don’t want to or can’t purchase it outright. With a lease, the business pays to use the equipment for a set period. At the end of the lease term, the business can choose to purchase the equipment, return it or lease new equipment.

Equipment leasing is an attractive option for business owners who need to upgrade equipment frequently or for those that have seasonal or fluctuating cash flow. Leases often require lower monthly payments than loans, and the business can deduct the lease payments as a business expense on its taxes.

2. Equipment Loans

Equipment loans are another option for businesses that need to purchase equipment. With a loan, the business borrows money from a lender to purchase the equipment outright. The loan term can range from one to ten years, and the interest rate is typically fixed.

Equipment loans can be a smart choice for business owners who want to own their equipment outright or have a long-term need for the equipment. Loans typically have lower interest rates than leases, and the interest payments can be deducted as a business expense on the company’s taxes.

3. Sale-Leaseback

A sale-leaseback is an option for businesses that already own equipment. With a sale-leaseback, the business sells the equipment to a lender and then leases it back. This can open cash flow for a business owner while still allowing you to use the equipment.

Sale-leaseback financing can be beneficial for businesses that need to free up cash quickly or want to use the equity in their equipment to finance other expenses. For many business owners, the better option is to finance the equipment in the first place rather than purchase outright, constrict cash flow and do a sale-leaseback later. Why? Sale-lease backs are very challenging to arrange and can be expensive. You have already paid for the equipment, including sales taxes. If you do a sale-leaseback, often the lender will want to have an appraisal completed. This is typically at your expense. Additionally, the lender often will advance a percent of the forced liquidation value, not the full price you originally paid. Finally, often the payment stream is subject to sales taxes—a double whammy on your tax obligation since you paid taxes on it once already.

How to Secure Equipment Financing in Six Steps

Securing equipment financing can be an easier, straightforward process if you follow these steps:

1. Determine Your Equipment Needs

Before applying for financing, determine what equipment your business needs and how much it will cost. This will help you determine what type of financing to pursue and how much money you need to borrow.

2. Check Your Credit

Lenders will look at your credit history to determine if you are a good candidate for financing. Check your credit score and report before applying to ensure there are no errors or issues that need to be resolved.

Don’t think because your credit history isn’t perfect that you’re locked out of the equipment financing market. Seek out direct lenders like Global Financing & Leasing Services (GFLS), who specialize in financing equipment for SMB owners with less-than-perfect credit.

LEARN MORE: Can I Finance Equipment with a 640 Credit Score?

3. Shop Around

Different lenders offer different rates and terms. Shop around to find a lender that offers competitive rates and terms that work for your business. Some lenders specialize in equipment financing, while others offer it as part of their broader suite of business loans.

GFLS was created to meet the equipment financing needs of small to mid-sized businesses all over the United States. Our team provides equipment financing solutions for a wide range of companies and a wide range of credits.

4. Prepare Your Financial Statements

Lenders will want to see your business’s financial statements, including your income statement, balance sheet and cash flow statement. Make sure these documents are up to date and accurate.

LEARN MORE: What Lenders Look for on Credit Reports

5. Gather Your Equipment Information

Lenders will also want information about the equipment you plan to purchase, including its value and condition. Be prepared to provide detailed information about the equipment and any maintenance or repair history. Also, be aware of any soft costs associated with the equipment, some of which may be included in your loan.

LEARN MORE: What are the Soft Costs of Financing Business Equipment?

6. Apply for Financing

Once you have selected a lender, submit your application and be ready to supply all the necessary and requested documentation. The lender will review your application and decide based on your creditworthiness and the equipment’s value.

At this point, the fact that you shopped around really becomes important. Applying for equipment financing with a lender who is truly willing to work with you can make the difference between being approved and denied.

Equipment Financing is a Powerful Tool to Grow Your Business

Equipment financing is a valuable tool for SMBs looking to purchase the equipment you need to operate and grow. With the variety of options available, businesses can choose the type of financing that best fits their needs and budget.

GFLS is an established direct lender with the unique ability to finance almost any business seeking to acquire equipment.  With our in-house funds and relationships with over 200 private label and public banks we have the ability to help those businesses who have been turned down by the banks.  Prior bankruptcy, student loans, tax liens, bad credit, we work with it all. If you have any questions, please get in touch.