Posts in category: Equipment Financing

Acquiring construction equipment, even used machinery, can be a significant investment for construction company owners, especially for those with less than perfect credit or startups without an extensive credit history. While traditional financing options usually create hurdles for these applicants, there are alternative options to obtain financing for used construction equipment.

Key takeaways for how to finance used construction equipment:

1. Assess your financial situation and credit score before exploring your used construction equipment financing options.
2. Research alternative financing options such as equipment financing, lease-to-own agreements and equipment rental.
3. Build strong relationships with equipment suppliers, vendors or dealerships to potentially receive customized financing solutions.
4. Consider alternative lenders who are more flexible in their eligibility requirements.
5. Work on improving your creditworthiness over time to increase your chances of securing favorable financing terms in the future.

1) Assess Your Financial Situation

Before applying for financing for used construction equipment, it is important to assess your current financial situation. Take a close look at your credit score, outstanding debts and cash flow. While less-than-perfect credit may limit your options, it does not render financing impossible. Big banks and traditional lenders may not be options, and it’s better to work with a lender who’s willing to work with you rather than waste time only to have your application denied.

2) Research Financing Options

Equipment financing is a popular choice for acquiring used construction equipment. Look for lenders that specialize in equipment financing for businesses with lower credit scores, like Global Financial & Leasing Services (GFLS). They are more likely to understand your situation and offer flexible terms. The equipment itself serves as collateral, making it easier to secure financing.

Another option is a lease-to-own agreement, where you lease the equipment for a specified period with an option to purchase it at the end of the term. This can be a viable option for startups or businesses with limited credit history.

If purchasing equipment is not financially wise at the moment, consider renting equipment on an as-needed basis. This can be a cost-effective alternative, allowing you to complete projects without a large upfront investment and save for a purchase or lease later.

3) Build Strong Relationships

Establishing strong relationships with lenders, equipment suppliers, vendors or dealerships can open doors to better financing options. Reach out and discuss your requirements, emphasizing your commitment and long-term business potential. Such relationships may lead to customized financing solutions or even the opportunity to purchase equipment on installment plans.

4) Consider Alternative Lenders

Traditional banks are hesitant to lend to construction company owners with less-than-perfect credit or startups without a long credit history. However, alternative lenders, like GFLS have more flexible criteria, even approving equipment financing for those with a 640 credit score.

5) Improve Your Creditworthiness

While immediate financing needs may be pressing, it’s important to work towards improving your creditworthiness in the long run. Pay your bills on time, reduce outstanding debts, and avoid taking on unnecessary credit. Over time, these steps can positively impact your credit score, making it even easier to secure financing in the future.

Remember, each business’s financial situation is unique, and what works for one may not work for another. It is essential to evaluate your financial situation carefully and consult with lending experts, like our team at GFLS. We have been providing equipment financing solutions since 2009.

Let’s talk about the possibilities. Or, get started today by filling out an online application.

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
  • Refer to Section 179
• 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.

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.

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.

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.

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.