Posts in category: Equipment Financing

The old adage “It’s not what you know, but who you know” holds true in the world of equipment financing. This is especially the case for business owners with less-than-perfect credit. Credit scores don’t paint the whole picture. While your credit score and financial statements are top priority for traditional lenders, there’s an often-overlooked asset that can swing the equipment financing decision in your favor with Story lenders: relationships.

Why Relationships Matter from a Financing Applicant’s Perspective

All business relationships, including those providing financial solutions, matter. Unlike traditional or large corporate banks, many equipment financing providers, like Global Financial & Leasing Services (GFLS), value personal relationships. We strive to understand the unique needs and challenges of each business owner. By nurturing this relationship, you help position you and your business in a favorable light. Strong relationships with lenders provide a holistic view of your business—your dedication, past successes and future potential.

Also, having strong ties with your suppliers can lead to negotiation power. This can result in being offered better terms, discounts or even referral advantages—all of which appeal to equipment financing lenders.

Five Ways to Build and Nurture Relationships for Equipment Financing Approval

1. Start Early

Establish a connection with your potential lender and suppliers before you need financing. Ways to make connections include attending industry events, joining trade associations and arranging informational meetings. Interested in talking to one of our Certified Lease and Finance Professionals (CFLP)? Schedule a meeting.

RELATED READING: Working with a Certified Lease and Finance Professional (CFLP) is a Smart Decision

2. Be Transparent

Transparency goes a long way. Be upfront about your financial challenges, offering context and showing how you’ve tackled these issues.

3. Foster Mutual Benefit

Think of ways you can benefit your lenders and suppliers. Offer them testimonials, referrals or partnership opportunities.

4. Stay in Touch

Maintain regular communication, sending updates or just a simple note of progress. Regular interactions with your lender, even outside of immediate financing needs, solidify trust. Celebrate milestones with them, discuss challenges or provide industry updates. This ongoing engagement underscores the value you place on the relationship, extending beyond mere transactions.

5. Be Informed

Understanding the intricacies of equipment financing shows your lender and suppliers your commitment and knowledge.

What Your Equipment Financing Partner Would Like from the Relationship

Very similar to how you can build and nurture relationships with your equipment leasing partner, your lender also looking for specific information and qualities through their relationship with you. You can help them gain insight into what Story lenders value: character, business acumen and collateral.

Since Story lenders don’t prioritize credit scores, lenders, like GFLS, want to get to know you. Showing integrity, commitment and responsibility speaks to your character. Understanding industry trends reflects business acumen. And, showcasing other valuable assets, beyond the equipment financed itself, improves collateral considerations.

For example, after we approved and commenced the lease, a freight brokerage firm was able to secure a Master Carrier Agreement with a major steel company. The signed agreement represents at least four years of work for our customer and opens up the opportunity to land other heavy hauling projects.

The Power of Referrals and Recommendations

Part of the power of relationships is the influence of referrals and recommendations that comes along with them. As you nurture your connections.

Seek out referrals from all connections. Don’t hesitate to ask your lender, suppliers or even other business colleagues for referrals. They might introduce you to other business growth ideas or supplier options that are aligned with your needs.

All relationships benefit from a give-and-take approach. Be generous with your recommendations. If a particular lender or supplier provided exceptional service, share that with your network. Your endorsement not only strengthens your bond with that person, but also positions you as a valuable connection in your industry.

Here’s another story about the power of relationships in equipment financing:

A 20-year-old trucking and excavating company that specializes in lawn care, excavating, digging basements, building foundations for new homes, and snow removal in the winter. Ninety percent of their customers are commercial businesses, such as nursing homes and cemeteries. Ten percent is residential business. One of their large customers is a state government, for which they are a subcontractor for snow removal.

The client says, “We were able to acquire the equipment quickly, and it was so fantastic to work with Pat, who was amazing, and Rachelle, who made it very easy and quick for them to go through the finance process.”

They would not have been able to secure the account if it were not for having the equipment we financed for them. This equipment enabled them to grow their business, as well. Prior to our financing solution, they had to rent equipment, which was more expensive. Additionally, since this was used equipment, they had difficulty finding someone who would provide the equipment financing.

Global Financing & Leasing Services (GFLS) simplifies and speeds up the equipment financing process. 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.

If you’ve ever purchased a vehicle, then you know what they say about new ones. A new vehicle depreciates thousands of dollars as soon as you drive it off the car lot. This alone is enough steer buyers toward purchasing only previously-owned vehicles. And, there is the price difference between new and used vehicles that keep budget-focus buyers solely in the more affordable used market. On the other hand, there are buyers who insist on purchasing only new vehicles, either due to personal preference, not knowing the previous owners’ maintenance diligence, and/or knowing they’ll keep the vehicle long enough to pay new vehicle pricing.

Do the same car buying principles apply to business owners when they want to obtain essential business equipment? And, is it easier to get financing for new or used business equipment?

Global Financial & Leasing Service (GFLS) was created to meet the equipment financing needs of small to mid-sized businesses all over the United States. Our team finds equipment-financing solutions for a wide range of companies and a wide range of credits. Partnering with both clients who have great financials and credit history and those who have less-than-perfect credit scores or have startup companies, GFLS has the ability to provide equipment-financing solutions. For those who have been turned away from traditional equipment lenders, we work hard to create a structure that will work for the situation. Since we work with customers across all credit ranges, we’re often asked about feasibility of financing equipment, and whether new or used is the way to go.

What Are the Advantages of Financing New Equipment?

Financing new equipment has a couple of advantages that can work in your favor. First, lenders might perceive new equipment as a less risky investment on their part. Like new vehicles, new business equipment used in a variety of industries typically come with warranties, improved reliability and reduced maintenance costs. The idea of reduced risk can make lenders more willing to offer financing options to business owners with less than perfect credit. After all, the equipment itself acts as collateral for the equipment financing loan.

Second, new equipment often includes the latest technology, which can measurably increase a company’s efficiency, productivity and profitability. These potential benefits can support your application for financing, especially when combined with a solid business plan and growth projections.

What Should You Consider About the Challenges of Financing New Equipment?

While there are clear advantages to financing new equipment, there also are potential challenges, which are similar to those you’ve probably experienced if you’ve decided to purchase a new car over a used one.

Like new vehicles, new equipment is typically more expensive than used equipment, meaning higher financing amounts. For business owners with less than perfect credit, the higher the financed amount, the tighter the lending criteria. In this case, it’s essential to find an alternative lender, like GFLS, that specializes in working with applicants who’ve been turned away from traditional lenders, like big banks.

RELATED READING: With Small Business Loan Approvals Hard to Come By, Alternative Financing Offers Hope

Also, that drive-off-the-lot depreciation is a factor. New equipment depreciation rate is usually higher, meaning the value of your collateral backing the financing decreases more rapidly.

What Are the Benefits of Financing Used Equipment?

Financing used equipment offers distinct advantages that can make it an attractive option for business owners with less than perfect credit. First, used equipment is generally more affordable than new equipment, resulting in lower financing amounts and potentially lower monthly payments or a shorter loan term. Of course, lower monthly financing payments are easier on monthly cash flow.

Second, used equipment tends to have a slower depreciation rate compared to new equipment, making it a relatively stable asset that lenders can count on as collateral. In other words, that rapid first-use depreciation has already occurred. This stability may lead to increased financing options, particularly if you have credit blemishes.

Browse our used medical and heavy equipment for sale.

What Should You Know About the Drawbacks of Financing Used Equipment?

While financing used equipment has its advantages, including potential lower overall costs and shorter loan terms, there are some potential drawbacks. Used equipment may have a shorter lifespan, higher maintenance costs and a higher risk of breakdowns or malfunctions compared to new equipment.

Also, the onus is on the business owners to perform their due diligence to ensure the used equipment they intend to finance is in good operating condition, has a reasonable remaining useful life, and aligns with operational needs and growth plans.

There’s No Simple Answer to Whether You Should Finance New or Used Equipment, so Talk to an Expert

The bottom line is that whether you apply for financing new or used essential business equipment depends on your lending options, your lender’s ability to meet your needs regardless of your credit score, the type of equipment you need and your budget. Finding the right financing solution takes evaluating your specific circumstances and considering the short- and long-term advantages and challenges.

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.