Posts in category: Financing

And Not the Big Banks

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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