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How Much Equipment Financing Will I Qualify For?

Of all the companies in the U.S., 72% of them use some form of financing when acquiring essential business equipment. On March 30, 2023, CBS News reported five million businesses launched in 2022. Since the pandemic started three years ago, there were 15 million new businesses launched in the United States, compared with 10 million in the three years pre-pandemic.

That’s millions of business owners trying to secure equipment financing to launch, expand and grow their companies. One of the most common questions new business owners ask is how much equipment financing will they qualify for? It’s a harder question to get answered for small and medium-sized businesses (SMBs). They often struggle to acquire financing for essential business equipment from traditional lenders, which is unfortunate considering SMBs employ the largest percentage of workers in the nation and are the backbone of the U.S. economy.

Global Financial & Leasing Services (GFLS) provides equipment financing solutions to a wide range of industries and companies, including startups that have less than two years’ time in business, established business owners with less-than-perfect credit and even startups with owners with below-good credit scores. GFLS can help with a financing/leasing plan that works for you. You tell us your story, and we listen. We are one of the few equipment financing companies who will advocate for you.

Through our equipment financing solutions, SMBs can acquire the equipment they need without paying for it upfront. Financing an equipment purchase versus an all-cash purchase comes with numerous benefits, including:

  • Typically, getting 100% financing with no down payment
  • Maintaining working capital to be used for other areas of your business, such as expansion or hiring more employees
  • Benefitting from tax considerations associates with purchase financing
  • Purchasing equipment that is revenue generating
  • Financing additional soft costs such as sales tax, delivery and installation
  • Building your Business Credit profile

Equipment Leasing and Financing Up to $1 Million for SMBs

GFLS does not use credit scoring to evaluate your credit submission. Our team aims to understand what happened in the past and what you have done to improve your financial performance going forward. We focus on your cash flow, character and the collateral.  We often will approve an application when no one else will.

GFLS can approve equipment financing from thousands of dollars up to $1 million. However, the higher the amount, the more the risk, so you’ll want to be prepared with collateral, credit history and equipment value.

You may need to provide significant collateral to secure $1 million in equipment financing. If you default on the loan, the lender can seize the collateral to recover the loan amount. The value of the collateral should be equal to or greater than the loan amount.

Before applying for equipment financing, check your credit score and credit report for errors or issues. Address any errors or issues before submitting your application to increase your chances of being approved for financing.

Provide detailed information about the equipment you plan to purchase, including its value, condition and estimated lifespan. The lender may require an appraisal or inspection of the equipment to ensure its value.

If you’d like to learn more about equipment leasing and financing up to $1 million for an SMB, get in touch with one of our financing experts.

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How Fast Can I Get Equipment Financing?

The news of recession is still looming, and big banks rallied to bolster smaller banks in light of the Silicon Valley bank run. We are starting to see the beginning of tighter credit restrictions—tightening harder with each real or anticipated interest rate hike. These restrictions will disproportionately affect small and mid-sized companies, especially those whose owners have less-than-perfect credit.

When the conditions above exist, there is less money available for lending in general, and thus for equipment financing. And, those with good to excellent credit will be approved over those who pose a riskier chance of repayment. Business owners who’ve been holding off on financing new or used business equipment and waiting to see where the economy goes before submitting a financing application are beginning to feel the pressure. Should they finance business equipment before interest rates go higher? If they wait, will their chances of getting approved for financing decrease thanks to tougher credit qualifications? The unknowns are leading business owners to act sooner versus later on obtaining equipment financing.

With more businesses looking for a source of financing for the equipment they need or want to acquire, Global Financial & Leasing Services (GFLS) is an excellent choice. We’re an alternative lender better positioned to support business owners with the equipment financing they need, when they need it.

Our team works quickly, reviewing equipment financing applications and making decisions in days rather than the weeks or months it takes other financial institutions. In fact, the only thing that slows down our equipment financing credit decisions is missing or incomplete information on the applicant’s side.

When you’re ready to move quickly on getting your equipment financing in place, here are three helpful tips for speeding up the application, and thus, the decision process:

  1. Have all your documentation ready, such as financial statements, tax returns and other relevant business documents.
  2. Clearly communicate why your applying for equipment financing. This can help your lender understand your business and the purpose of the equipment. Since GFLS funds applicants who have less-than-perfect credit, your story, background and history matter. “When other lenders say no, we often say yes.” ™
  3. Make sure to look out for and respond promptly to any requests for additional information or documents. This helps keep the process moving smoothly.

How Fast You Can Get Equipment Financing Assumes You’ll Be Approved

Asking how fast you can get equipment financing assumes you’ll be approved. Fact is that traditional lenders, like banks, don’t only take weeks, or even months, to process a credit submission, but also decline the application 40% of the time. When banks do approve an equipment financing application, the documentation they require the applicant to sign can be overwhelming and add weeks to actually getting the funding.

If we receive your application and all the documentation we ask for, we often turn around a credit decision within 48 hours or less. That’s how fast you can get equipment financing with GFLS. See for yourself. Get started on your application today.

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Equipment Leasing & Financing up to $1 Million for SMBs

Small and medium-sized businesses (SMBs) play a crucial role in the economy. Without them, the economy would grind to a halt. So, why is it that SMBs often struggle to acquire the necessary equipment to operate and grow? Equipment financing provides a solution that allows SMBs to acquire the tools they need without paying for them upfront. But what if you need a million dollars for equipment financing? Is it difficult to secure that amount of financing?

Here’s a look at what goes into getting equipment leasing and financing up to $1 million for an SMB.

Lender Requirements

When considering equipment financing, it’s crucial to research potential lenders to find the right fit for your business. Some lenders specialize in equipment financing, while others offer it as part of their line of financial and business services. Lenders have different requirements for borrowers, such as collateral, credit score and income requirements. Some only finance applicants with top-tier credit and credit scores.

If you’re seeking a million dollars in equipment financing, you may need to provide significant collateral to secure the loan. Collateral is an asset that can serve as security for the loan. If you default on the loan, the lender can seize the collateral to recover the loan amount. The value of the collateral should be equal to or greater than the loan amount.

Creditworthiness

Your credit score and credit history are critical factors in determining whether you can secure a million dollars in equipment financing. Lenders use credit scores to assess your risk as a borrower, and a high score increases your chances of being approved for financing. If you have a low credit score or negative credit history, it may be more challenging to secure financing or result in higher interest rates, but not impossible. To talk about your chances for qualifying, get in touch with one of our financing experts.

Before applying for equipment financing, check your credit score and credit report for errors or issues. Address any errors or issues before submitting your application to increase your chances of being approved for financing.

LEARN MORE: You Need to Package Your “Story Credit”

Equipment Value

The value of the equipment you need to purchase is another critical factor. Lenders will assess the value of the equipment to determine if it can serve as collateral for the loan. If the equipment’s value is lower than the loan amount, lenders may require additional collateral, a higher down payment or offer a shorter loan term.

It’s essential to provide detailed information about the equipment you plan to purchase to the lender, including its value, condition and estimated lifespan. The lender may require an appraisal or inspection of the equipment to ensure its value, especially for $1 million-worth of financing.

Economic Climate

The overall economic climate can impact the availability of financing. During a recession or economic downturn, lenders may be more cautious and conservative in their lending practices, making it more challenging to secure financing. However, during a strong economy, lenders may be more willing to lend to SMBs and offer more favorable terms.

The economy is uncertain right now with some predicting a recession. When lenders, like Global Financing & Leasing Services (GFLS), step up to provide equipment financing, businesses have a strong chance of surviving economic ups and downs. GFLS was founded in 2009 during the Great Recession to support businesses. We have a history of successful lending, access to capital and commitment to our mantra: “When Other Lenders Say No, We Often Say Yes.”™ 

If you’d like to learn more about equipment leasing and financing up to $1 million for an SMB, contact us.

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The Best Equipment Financing Options of 2023 for Business Owners

For many people, the new year is a time for setting personal resolutions. Yet, statistics indicate most people let theirs slide by the end of February. For business owners, it’s not only the start of a new year, it’s first quarter—a time to kick off year-long sales goals, new initiatives and grow your company. Business “resolutions” aren’t as easy to let slip because there are livelihoods, including yours, counting on your follow-through and success.

If 2023 is the year you’re going to need to finance essential equipment to achieve your goals, here are a few of the best options for business owners to consider.

  • Bank loans: You can apply for a loan from a bank or other financial institution to finance your equipment. This option may have a lower interest rate, but the application process can be lengthy, and you may need to provide collateral, as well as meet a minimum credit score requirement.
  • Small business loans: If you are a small business owner, you may be able to qualify for a small business loan from the government or a private lender. These loans are specifically designed to help small businesses finance equipment, among other things. The application process is wieldy and the time can lag between application and funding. Generally, very good to excellent credit is required to qualify.
  • Leasing: Instead of buying the equipment outright, you can lease it from a leasing company. This allows you to use the equipment without having to pay the full purchase price upfront. However, you will need to make regular lease payments and may or may not have the option to purchase the equipment at the end of the lease, depending on how the lease is structured. Another option is to finance the equipment lease.
  • Equipment financing: There are specialized, direct lenders, like Global Financial & Leasing Services (GFLS) who offer equipment financing, which is a loan used for the purpose of buying (or leasing) essential business equipment. The terms of these loans can vary, so it’s important to shop around and compare offers, application processes and customer service to find the best match for your business and credit score.
  • Vendor financing: Some equipment vendors offer financing options to help you purchase their products. This can be a convenient option, but be sure to compare the terms of the vendor’s financing to other options to ensure you are getting the best deal.

Even Those with Less-Than-Perfect Credit Can Qualify for Equipment Financing

If you have credit blemishes, it may be more difficult to secure financing for equipment. However, there are still ways you can get the equipment your business needs this year.

  • Personal loans: If you have a good relationship with a bank or credit union, you may be able to get a personal loan to finance your equipment. The interest rate on a personal loan may be higher if you have B or C tier credit, but it can still be a possibility. Keep in mind that in most cases it’s considered smarter to keep business and personal finances separate. Intertwining the two puts both at risk should one go south.
  • Crowdfunding: If you are unable to secure financing through traditional channels, you may be able to raise funds for your equipment through crowdfunding. There are several crowdfunding platforms that allow business owners and entrepreneurs to pitch their ideas and solicit small investments from a large number of people. Crowdfunding is an option for both new and existing companies, but it’s gained popularity among startups in recent years, and for many has been quite successful in supporting their launch.
  •  Equipment financing: Some equipment financing companies, like GFLS, specialize in working with business owners who have less-than-perfect credit. LEARN MORE: Can I Finance Equipment with a 640 Credit Score?
  • Leasing: Leasing equipment may be a good option if you have bad credit, as the approval process is often less stringent than for a loan. However, as noted above, be aware that you will need to make regular lease payments and may or may not have the option to purchase the equipment at the end of the lease. LEARN MORE: Loans vs. Leases: Choosing the Right Option for Equipment Financing

What Should Business Owners Look for in a Lender?

When looking for a direct lender to finance your equipment, there are five things you should consider:

  1. The interest rate on your loan will directly impact your monthly payments and the overall cost of financing your equipment. Partner with a lender who is willing to help you obtain the best deal for your budget and credit situation.
  2. The loan terms, including the length of the loan and any fees or charges, can significantly affect the overall cost of your equipment financing. Be sure to understand all the terms of the loan before you agree to it.
  3. It’s important to work with a reputable lender with certified professionals who have a history of fair and ethical lending practices. Do some research and read reviews to get a sense of the lender’s reputation.
  4. If you have questions or need help during the loan process, it’s important to work with a lender that has good customer service. Look for a lender who is responsive and willing to help you with any issues that may pop up.
  5. Consider whether the lender is willing to work with you to tailor a loan that meets your specific needs. A lender who is willing to be flexible and find a solution that works for you will be the best fit.

GFLS provides equipment financing solutions with no hard cap on the amount for a wide range of companies and a wide range of credits with no minimum FICO score requirement. Ready to learn more? Let’s talk about the possibilities. Or, get started today by filling out an online application.

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Can You Still Get Equipment Financing Approved Before the End of the Year?

You Still Have Time For Financing

It’s a time sensitive issue. You’d like to obtain essential business equipment, and you want it on the books for 2022, lock in a lower interest rate before rates rise or both. Time is running out, and considering how long it takes for the majority of lenders, like traditional banks, to approve your equipment financing application, it may seem impossible. Trust us. It’s not too late to get equipment financing approved before the end of the year.

The key is to work with a direct lender, Global Financing & Leasing Services (GFLS), who has the in-house funds and solid relationships with outside banks and institutions necessary to tailor a financing solution to your needs, budget and goals.

One reason our clients rely on us for their financing needs is because we understand time is of the essence. More likely than not, and especially if you want equipment and financing in place by year’s end, you need to choose a lender who works quickly.

At GFLS, we can get back to you with a credit decision in 48 hours or less. With a caveat… you must have the financial documents our team requests ready for review. The quicker we have them; the quicker you receive an equipment financing decision.

An In-Depth Look at GFLS’s Equipment Financing Decision Timeline

For Equipment Financing Worth $75,000 or Less

  • Submit your financing application to GFLS for review
  • Have the following documents ready for review:
    • Last three months of your business’s bank statements
    • A quote/invoice from the vendor for the equipment you’re financing

For Equipment Financing Worth $75,000 Up to $1 Million

Between our available in-house funds and external financial relationships, GFLS can fund equipment financing amounts of up to $1 million. Applications requesting credit over $75,000 require our team review your complete financial picture.

  • Submit your financing application to GFLS for review
  • Have the following documents ready for review:
    • Last three months of your business’s bank statements
    • A quote/invoice from the vendor for the equipment you’re financing
    • Last three years of business tax returns
    • Profit & Loss (P & L) statements for the business

What are Circumstances That Can Delay Getting Equipment Fast?

Even if you have your application submitted, provide all the necessary and/or required documentation and receive financing approval, there are circumstances that can delay getting your essential business equipment outside of yours or your lender’s control, including:

  • Last-minute changes to the equipment order
  • Supply chain issues
  • Shipping delays

Keep in mind that the year you take receipt of the equipment is the year in which you can claim it for tax purposes, so make sure to double check with vendors on their equipment availability and shipping times. While those circumstances are out of our control, if you have your application complete and required documents ready to go, GFLS’s team is ready to help you finance business equipment in the final days and weeks of December.

Have a specific question we can answer for you? Our team is ready to help. Contact us today.

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Should You Finance or Buy Heavy Construction Equipment?

Your construction company needs heavy equipment. Maybe you’re expanding, want the opportunity to bid a certain project, or intend to competitively position your company for earning government contracts associated with the Infrastructure Investment and Jobs Act (IIJA).

Your first, and maybe most important, decision is how to pay for the construction equipment. As you well know, heavy construction equipment is a significant investment, which comes with a hefty sales price. Should you finance or purchase it outright?

Even if you have the cash on hand to outright purchase heavy construction equipment, there are a few reasons not to make that large of a capital outlay. Many economists predict the U.S. will experience a recession. Jim Jenks, Global Leasing & Financial Services founder and CEO says, “In this economy, conserving your cash is critical. Over the next two years business owners will want to stretch their cash flow rather than sink it into hard assets, which diminishes the cash you might need down the road.”

Buying your heavy construction equipment may very well put your business in a precarious position when/if our economy goes into a recession. However, there are other reasons that make financing a heavy equipment purchase a smart decision, including:

  • Monthly payments are easier to budget for and manage. Financing your heavy construction equipment means you make set monthly payments for a set period of time. This allows you to budget for the long-term, as well as bid projects in a way that covers your equipment payments. Financing lets you extend paying for a major purchase over the course of years, and hopefully fund the payments with project revenues.
  • Expand your heavy construction equipment fleet faster. Yes, cash is king. It’s also a limited resource. Purchasing equipment outright depletes your cash, limiting your ability to grow your fleet as quickly as you might like. For most construction business owners, it is far more realistic to finance multiple pieces of heavy equipment at a time than pay cash for each of them. Carefully review your finances to ensure that you can manage multiple monthly payments.
  • Maintain your company’s financial flexibility. Financing allows you to reserve cash on hand to ride out a slow month or quarter, hire additional staff to take on new projects, or purchase additional materials or assets needed to successfully bid on a potentially lucrative project.
  • The outcome is the same whether you purchase outright or finance your heavy construction equipment. Financing heavy equipment can result in the same outcome an outright purchase does. Meaning, you can still own the equipment at the end of your financing agreement. Or, you can start the financing process all over again with a new or upgraded piece of equipment.

Explore Your Heavy Construction Equipment Financing Options

Every construction company is unique and must match its financing solutions to its operations and growth plans. Beware of lenders who offer limited or one-size-fits-all financing options. Instead find a partner, like Global Financial & Leasing Services (GFLS) who looks at your business holistically and on its own merit to customize your financing.

GFLS is a trusted source for construction equipment financing, helping companies secure the financing they need to obtain reliable new or used equipment. As a direct lender, we use in-house funds for financing equipment, as well as our relationships with banks and other institutions, so we can create the perfect financing plan for you.

The process is simple. After you submit your financing application, we will quickly review it and give you a decision. More often than not, we approve businesses regardless of their credit. If you have tried other lenders who rejected your request, consider working with us.

With GFLS, you can:

  • Get competitive rates, as well as 100% financing
  • Benefit from tax deductions on essential-use equipment
  • Avoid down payments; we ask for your first payment in advance, and then you can pay once you receive money
  • Save your cash
  • Maintain or establish your credit through leasing
  • Obtain equipment while it is current without making big purchases that will soon become obsolete
  • Purchase the heavy equipment after the financing agreement ends

Work with a company you can trust for all of your construction equipment financing needs—GFLS. Contact us today for more information regarding our construction equipment financing.

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The Growing Urgency to Find Equipment Financing Loans

Last month, Goldman Sachs CEO, David Solomon told Reuters he believed there is a “reasonable chance of a recession in the U.S., but it’s not certain.” His statement is in line with what others in the financial industry are predicting. Fitch Ratings reported the U.S. economy will experience a recession beginning the second-quarter of 2023, but robust U.S. consumer finances will help soften its impact.

Meanwhile, the Federal Reserve has increased interest rates five times in 2022 alone, bringing up rates three percentage points this year, the most in a single year since the 1980s. The Fed showed signs of increasing rates by another 1.25 percentage points before the end of 2022, bringing the federal funds rate to 4.25-4.5 percent.

What are business owners who know they need to finance essential business equipment to do?

“If you’re balancing risks and you get less worried about the economy slowing and more worried about inflation just staying high and getting built in to the price and wage-setting process, then you might conclude you need to move faster,” says Bill English, finance professor at the Yale School of Management, who spent 20 years at the Fed. “Lags just make the problem harder because you have to be forward-looking and judge where the economy is going to be.”

“You Need to Move Faster”

Interest rates will not drop any time soon, that’s for certain. Locking in a lower equipment financing rate now will save you money compared to financing later at a higher rate. Not only do you benefit from lower rates before the Fed raises them again, you also gain the advantage of being able to competitively positioning your company against others who might choose to wait out high interest rates. With financed equipment, you could offer products or services your competitors don’t or at a price they can’t match.

An Equipment Financing Loan Lets You Reserve Cash

Financing allows you to keep cash on hand to ride out a slow month or quarter, hire or retain staff, or purchase materials or assets needed to bid on and win a revenue-generating project. With a recession looming, conserving your cash is important. Over the next two years business owners will want to stretch their cash flow, which isn’t possible if it’s spent on an equipment purchase.

Where You Can Find Equipment Financing Loans and Get Approved Quickly

Bank and Credit Union Equipment Financing

Banks and credit unions offer equipment financing loans. Unless your credit score falls in the good or excellent range, financing equipment through them is difficult or impossible since they usually approve applicants with top-tier credit scores.

If your credit score meets bank or credit union qualifications, expect a lot of paperwork and a long wait time for approval. If you have an urgent need for business equipment, don’t have a sizable down payment, don’t want liens placed on other business or personal assets or have credit blemishes, traditional bank or credit union equipment financing isn’t your best option.

Vendor Equipment Financing

Equipment vendors can suffer during a recession due to lower sales volume. Vendors create equipment financing programs through direct lenders, like Global Financial & Leasing Services (GFLS). These programs benefit both you and venders. You can explore financing a higher priced piece of equipment rather than settle for less expensive machinery priced within a traditional bank’s amount they approve you for. You may have more flexibility, especially when the vendor works with a lending partner committed to closing sales. You might even be able to take advantage of sales and discounts vendors offer to boost sales during a recession.

SBA Equipment Financing

SBA loans are an option if you have excellent credit and are growing or expanding business and need equipment to do so. But, the application and approval process can take months, and the majority of applicants are denied due to bad credit, character issues, lack of collateral, insufficient revenue or capital to repay, and inability to repay due to other outstanding loan payments.

Direct Lender Equipment Financing

GFLS is a direct lender, providing funding opportunities that typical banks don’t. In certain situations, we can use our connections to numerous banks and institutions to offer you the best financing solution for your credit profile. In the end, you get the right financing for your needs and faster access to the funds.

If you’re interested in getting equipment financing before rates go up again, our process is simple and streamlined. Talk to one of our equipment lease financing experts at 480.478.7400 or start your application today.

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Loans vs. Leases: Choosing the Right Option for Equipment Financing

With so many financing options available from a variety of lending sources today, it’s easy to be overwhelmed by choices, especially considering you’re making a serious financial commitment. While you’re weighing choices, your business lacks the equipment needed to launch or grow. If you’ve been trying to decide whether to rent, finance or purchase outright the essential business equipment your company needs, we hope this article makes the decision a lot easier for you.

Let’s take the business factor out of the equation. That way you can better understand your equipment financing options because you’ve probably already made similar choices in your personal life. For example, you had reasons for choosing where you live and what you drive. If you rent your home, essentially you are leasing it from the owner, be it a house or apartment. You can live there as long as you pay your monthly rent, and the owner still owns the property at the end of your lease. If you pay a mortgage, you took out a loan with a lender who gave you the money to buy your home. Once you pay the lender back, you own your property. Same goes for your vehicle. You chose to lease or buy it. If you lease it, you’ll return it at the lease’s end. If you bought it, you either paid cash or took out a loan and make payments, after which you’ll own it.

Why rent versus buy a home? There are many reasons, including saving up for a down payment, a rent payment being more affordable than a mortgage, ensuring what you buy meets your long-term needs and goals, etc.

Why lease versus buy a vehicle? Again, there are many reasons, such as high usage results in wear and tear you don’t want to be responsible for and the vehicle you need in the short-term isn’t the one you’ll need in the future.

If you think about how to finance your essential business equipment in those same ways, deciding between renting, financing or an outright purchase becomes much easier.

Questions to ask yourself before deciding whether to finance an equipment lease or loan:

Do you want to own the equipment eventually? If yes, then financing an equipment loan is right for you. Like a mortgage or car loan, once your loan is paid off, the equipment is yours.

Do you have a down payment or sufficient collateral to qualify for an equipment loan? If not, then financing may be your best bet for getting the equipment your business needs. The additional revenue generated from having essential equipment can be saved for purchasing equipment down the road.

Is the equipment something you’ll use for years or is it the type that is often updated, requiring you to upgrade? If you intend to keep the equipment for a while, an equipment loan makes sense. If you know you’ll need to upgrade the equipment to stay competitive (like medical equipment), financing an equipment lease makes sense because you can return the equipment at the lease’s end and upgrade at that point.

If You Decide to Finance, You Have Two Choices, an Operating or Capital Lease

Operating leases typically have lower monthly payments and you have the choice to either relinquish the equipment at the end of the lease term or buy it at fair market value.

Capital leases generally have higher monthly payments. Although a capital lease is much like a loan, you don’t include it on your balance sheet during the lease term. At the end of the lease, you can buy the equipment for a nominal price, such as $1 or a percentage of the purchase price.

Bottom line: If you decide to finance, consider a lease, as you will be often expensing the rental payments like any other operating expense as you use the equipment.

If You Decide to Take Out a Loan, Understand the Lender’s Requirements

If you choose an equipment loan, your lender will front the money to purchase your piece of equipment. Depending on your lender, you can finance all or most of the purchase price. Like a home or car loan, you’ll pay any down payment, if required, and make monthly payments that cover principle and interest. After the loan’s paid off, you own the equipment outright.

READ MORE: With Inflation and Rising Interest Rates, Is Now a Good Time to Finance Equipment for Your Business?

Our Team is Here to Help

Many small and medium-sized businesses prefer Global Financial & Leasing Services (GFLS) to traditional banks or alternative online lenders due to our easy application process, holistic decision-making and personalized approach to lending. Our equipment financing experts listen to your needs and goals to find a solution that works not only for your budget, but also to meet your short and long-term business goals.

GLFS’s credit application process is designed to be as streamlined as possible, while still giving us a full picture of your business and needs. We understand that time is of the essence when running a business, so we often can get back to you with a credit decision within 72 hours.

Contact us to learn more about how we can help your business.

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Where Can I Find Equipment Financing Loans?

Luckily, banks and credit unions aren’t the only place you can find equipment financing loans. Times have changed, and now you have several options to finance the essential business equipment your business or startup needs.

Equipment Financing Loans from Banks

Banks and credit unions are still options for finding equipment financing loans, but too often they are not in reach for some business or startup owners. Unless you have good or excellent credit, financing equipment through a traditional bank is next to impossible since they typically approve applicants with top-tier credit scores. Even if your credit score is up to snuff, you face a lot of paperwork and long wait times for final approval. If you have an urgent need for business equipment, don’t have a sizable down payment, don’t want liens placed on other business or personal assets or have credit blemishes, you’ll be disappointed with a traditional bank’s equipment financing.

Equipment Financing Loans from Vendors

Equipment vendors, when faced with fewer sales, began offering equipment financing loans to customers. This gave business owners a way to obtain essential equipment without going through normal bank channels. Vendors create equipment financing programs through direct lenders, like Global Financial & Leasing Services (GFLS). These programs benefit both buyers and venders. Buyers can explore financing a higher priced piece of equipment rather than settle for less expensive machinery priced within the bank’s approved amount. Vendors are able to sell equipment to buyers who wouldn’t otherwise qualify from a traditional bank. With vendor financing, consumers have more flexibility, especially when the vendor works with a lending partner committed to closing sales.

SBA Equipment Financing Loans

The Small Business Administration (SBA) is a federal organization that has low-cost, government-backed loan programs for small business owners. The SBA backs a portion of the loan a small business owner obtains from lenders, such as banks and nonprofits. SBA loans are less risky for the lenders, and they can come with lower interest rates and longer terms for borrowers. For example, current interest rates for SBA loans in September 2022 are:

  • SBA 7(a) loans: 7.75% – 10.25%
  • SBA CDC/504 loans: Approximately 5.39% – 5.46%
  • EIDL loans for COVID relief: 3.75% for for-profit businesses and 2.75% for nonprofit businesses.
  • PPP loans: 0% if forgiven; 1% if not forgiven.
  • Maximum rates for other SBA disaster loans: 4.00% with no credit available elsewhere, or 8.00% with credit available elsewhere.

SBA loans are an option for business owners with excellent credit who are growing or expanding business with equipment. But, the application and approval process can take months, and the majority of applicants are denied due to bad credit, character issues, lacking collateral, insufficient revenue or capital to repay, and inability to repay due to other outstanding loan payments.

Financing Equipment Through Sale/Leaseback

Financing business equipment through a sale/leaseback is like using your home equity for a purchase. An equipment sale/leaseback loan is an option if your business owns assets like trucks, machinery or construction equipment.

The equipment is sold or leased, but retained for business use. Because the transaction is secured by the equipment, this loan type is relatively easy to qualify for, and it can be structured so you can own the equipment at the term’s end, ranging from 24-60 months and the payments are tax deductible. Sale leasebacks often require an equipment appraisal from a Certified Asset Appraisal firm, and the lender often lends to advance a percentage of the Force Liquidation Value of the appraisal.

Equipment Financing Through a Direct Lender, Like Global Financial & Leasing Services

Global Financial & Leasing Services (GFLS) is a direct funder, providing funding opportunities that typical banks don’t. In certain situations, we can use our connections to numerous banks and institutions to offer you the best financing solution for your credit profile. In the end, you get the right financing for your needs and access to the funds faster.

Unlike big bank applications, our process is simple and streamlined so you have a decision often in 24 hours or less. Talk to one of our equipment lease financing experts at 480.478.7400 or start your application today.

What is Machinery Equipment Financing?

The textbook definition of equipment financing is a lease or loan used to obtain equipment for a business. Adding machinery to the term only means the equipment obtained is machinery or manufacturing equipment of some sort. There is equipment financing available for all industries, such as medical, restaurant, printing and more. Equipment financed is usually essential to a business’s operations and considered an asset, and therefore doesn’t include real estate because property is obtained via a commercial real estate loan.

Why Business Owners Need Access to Machinery Equipment Financing

If you follow any corporate moguls on social media, listen to business-related podcasts or read finance news, then you know how very rarely business owners and leaders contribute their success to luck alone. Maybe a few lucky breaks here and there or being in the right place at the right time, but success comes from making smart and strategic business decisions. Often, business decisions are based on whether or not you can afford to make them.

Regardless of how strong cash flow is, having access to equipment financing is especially important for business owners in industries that require machinery and/or manufacturing equipment because their cost runs tens to hundreds of thousands of dollars.

Having a source for equipment financing is just as critical for startup entrepreneurs who need machinery equipment financing to get their business off the ground.

Either way, considering the high price of machinery and manufacturing equipment, financing a purchase or lease means taking on a monthly financial commitment—one that will help your business grow and generate a level of revenue that more than covers the lease or financed purchase payment.

Machinery Equipment Financing Vs. Equipment Leasing

If you need to finance your machinery or manufacturing equipment, you have two options. Take out a loan to purchase it or lease it. Making the best and smartest decision for your business and circumstances depends on two main factors:

  1. Your personal and business credit rating because those affect your ability to qualify for financing
  2. The useful life expectancy of the equipment you’re financing

Let’s take a closer look at these factors.

If you have a good or excellent credit score, equipment financing is far easier. However, if your credit score is 640 or below, you will find a limited number of lenders willing to finance your machinery or manufacturing equipment.

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

Machinery and manufacturing equipment are workhorses designed to last for years with proper maintenance and service. So, the useful life expectancy is long. Think in terms of useful then to your business. Will you keep the equipment for the long haul? Then, financing its purchase may make the most sense. Will you be upgrading soon or using it for just a handful of jobs? Then, equipment leasing might be the way to go.

LEARN MORE: Your Approach to Financing an Equipment Lease Matters

Talk to One of Our CLFPs About Machinery Equipment Financing for Your Business

Global Financial & Leasing Services (GFLS) has Certified Lease and Finance Professionals (CLFP) on our team to help you choose and get the equipment financing that’s right for your business goals and finances. CLFPs must pass various tests and meet strict professional and ethical requirements to become officially certified, making them more reliable partners than non-certified lenders.

CLFPs are the best of the best in equipment financing. They demonstrate extensive knowledge of the field, and also, have never been involved in any questionable transactions. When you work with a CLFP like those here at GFLS, you know that your lender is competent and has your best interest in mind.

GFLS can 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 finance those who have been turned down by the banks due perhaps to prior bankruptcy, student loans, tax liens and bad credit. Want to learn more? Let’s talk about the possibilities. Or, get started today by filling out an online application.