It’s only second quarter of 2023 and three banks—First Republic Bank, Signature Bank and Silicon Valley Bank—have failed. While First Republic Bank was the last to fail so far this year, it is the second largest bank failure in history with approximately $229 billion in assets before failing, second only to Washington Mutual’s collapse in 2008, holding $307 billion at the time.

Since 2020, 565 banks have failed, averaging out to about 25 failures annually. With three so far in 2023, bank failures are actually lagging behind the yearly norm. That’s a positive sign, but is still concerning given the current anxious economic climate and ongoing concerns regarding a looming recession.

Moody’s Investors Service cut its outlook for the entire U.S. banking sector and placed six U.S. banks on review for potential credit rating downgrades. According to a CNN article published in March, 2023, Moody’s said, “The good news is that America’s banking system is generally healthy. It has enough cash and liquid assets to withstand an economic downturn. The bad news, for banks anyway, is that U.S. regulators may require them to hold more capital after Silicon Valley Bank’s rapid failure.”

Lots of eyes watch over the banking industry, from regulators and politicians to investors and financiers. Your eyes should be on your bank. Their current standard business practices could be killing your credit history, and you might not realize it until it’s too late and the damage is done.

How do we know? Unlike traditional lenders and big banks that make credit decisions based solely on a credit score, Global Financial & Leasing Services looks at the applicant’s whole story. Primarily, our team works with business owners who have less-than-perfect credit to get them the funding they need to acquire essential business equipment. Getting the whole story requires asking questions about why accounts were closed or why there is negative activity reported. Sometimes, the answers are surprising and little or no fault of the applicant.

The following are real-world banking situations our team has heard while discussing finances and credit histories with equipment financing applicants. We’re sharing them to help make you better informed and in a better position to obtain equipment financing when you need it.

Banks Close Accounts Seemingly on a Whim

Our team spoke to an applicant to inquire about a closed bank account. Turns out the well-known, big bank closed the account due to non-sufficient funds (NSF). If you read your account agreement, the small print states the bank can close or suspend your accounts for any reason they see fit. This particular applicant was fortunate to discover the reason; however, banks aren’t forthcoming with their reason most of the time.

With fraudulent activity and crime on the rise, any irregular activity can result in a Suspicious Activity Report (SAR). If banks fail to submit a SAR when there is reason, banks face heavy fines and employees are penalized. Closing accounts is a way big banks protect themselves and their shareholders from SAR-related sanctions. Unfortunately (or fortunately, depending on your position), the suspicious activity reported is not crime or fraud related a vast majority of the time, but rather a customer making an unusual transaction. For example, depositing large checks from retirement accounts to fund a business purchase, etc. Without personal relationships with their customers anymore, banks are closing accounts proactively to protect their interests.

Banks Stick to Automatic Payment Dates

Automatic payments that come directly out of bank accounts make paying bills and loan payments easy. It avoids ever missing a payment due to a bill lost in the mail or simply just forgetting to pay it. The set date the automatic payment comes out of the account can be problematic though if you’re not tracking your available account balance and don’t have enough funds to cover the payment.

Set a calendar alert for each auto draft date. Check your account balance to ensure sufficient funds are available to cover the payment. Banking is automated. It doesn’t wait a day for a check to clear before withdrawing an auto draft.

A benefit to obtaining equipment financing with Global Financial & Leasing Services is that all our clients have to do is call us if their account balances won’t cover the auto draft. We can pause it and avoid a rejection, plus the service fee big banks charge, and worst case, a closed account. Having a personal relationship with your financing company matters in the time of automation and technology.

Banks Put Unnecessarily Long Hold Times on Your Deposits

Imagine depositing a check, anticipating paying bills or payroll with funds from that check, and having the bank put a 7-10 day hold on the funds. In today’s electronic world, there’s no reason for a bank to place a hold for more than two days.

We’ve listened to applicants who’ve deposited funds, say from accounts receivables, pay invoices and payroll using those funds, only to be charged multiple overdraft fees or had payments rejected.

Stay Informed and Protect Your Credit

Things happen, in and out of your control, that can negatively affect your credit history. But, what’s even worse is when your bank’s standard practices are working against you. Remember, it’s your money. You have the power to bank where your business is valued, where you’re more than an account number.

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

10 Trends to Watch

Our world changed dramatically over the past year with many working from home, social distancing and video conferencing as a result of COVID-19.

Fortunately, the vaccine has brought about hope for a return to normal, and as restrictions lift, the economy is set to rebound. This year will be a crucial one for many business owners, especially those making decisions regarding financing equipment.

At Global Financial & Leasing Services (GLFS), we stay on top of the latest trends in equipment financing to better serve our customers, helping them not only obtain financing for equipment purchases, but also being a source of valuable industry information. These are the top 10 trends to keep an eye on as you consider equipment financing in 2021.

1. 2021 is still unpredictable.

In 2020, we learned just how quickly the world could change as COVID-19 drastically altered business operations and consumer habits. Things are looking up in 2021, but there is still uncertainty about virus variants.

Whether we can return to some sense of normalcy will depend on vaccine rollouts, which have been ramped up, but are still inconsistent. Other impacts of the pandemic — such as volatility in the stock market, small business losses and potential inflation — still linger as well. Successful business owners in 2021 will need to expect the unexpected and prepare accordingly.

LEARN MORE: Love in the Time of COVID-19

2. The political landscape is changing.

The transition of power to President Biden could impact business decisions in various ways. Congress and the Biden Administration will likely increase regulation — especially in the realm of environmental policy. Taxes may increase as well.

On the state level, governors are under increased pressure to close budget gaps, which may also result in increased business or consumer taxes. States may also adjust their consumer financing laws to address issues that result from post-pandemic growth.

3. Expect more growth in the second half of the year.

The first half of 2021 still looks relatively bleak for some industries. COVID-related restrictions and low consumer spending have extended the economic impacts of the virus.

However, this trend is expected to subside as more people become vaccinated and more restrictions are lifted. In the latter half of 2021, economists expect GDP growth to pick up to nearly 5% as the country returns to normal. Smart businesses will prepare for an uptick in consumer spending by the end of the year.

4. Increased demand from China will boost U.S. businesses.

China is one of the few major countries whose economies weathered the pandemic relatively well. Barring an increase in tensions between the U.S. and China, demand for U.S. products should increase as China’s consumer spending rebounds.

This uptick in demand will help propel U.S. manufacturers and the economy forward. Manufacturing businesses should prepare for this demand accordingly, especially when it comes to shipping.

5. Consumer habits will evolve post-pandemic.

As the government lifts pandemic restrictions, workplaces will return to some sense of normalcy. More employees will return to offices, and increased consumer spending will allow businesses to boost hiring and production.

The technology upgrades, lessened business travel and reduced need for commercial space that began during the pandemic are also likely to continue in a different fashion. Many workplaces intend to use a hybrid model that allows some employees to work from home full- or part-time, and they will continue to use videoconferencing solutions instead of traveling for business trips. Most businesses will therefore look for services that offer bundled, personalized packages that meet their needs.

6. Medical, construction and manufacturing equipment will be in high demand.

Demand for certain types of equipment is expected to grow as COVID-19 subsides. Medical equipment, for instance, is already showing growth as vaccine rollouts intensify, and once hospitals can resume more elective procedures, this sector is expected to explode. Likewise, demand for manufacturing equipment is set to increase as consumer spending bounces back.

Some types of equipment, including construction equipment, have been on the rise throughout the pandemic. More people are building or renovating homes, driving up demand for construction. Additionally, as workplaces convert their commercial space, construction equipment will remain on the rise.

7. Smart technology will continue to grow.

Many companies, including equipment finance lenders, have begun to increasingly rely on smart technology to do business. This trend is only expected to continue through 2021.

Electronic transactions with lenders, such as e-signatures, will likely continue to expand. Even without the need for social distancing, these kinds of contactless purchases can often be more convenient for lenders and businesses. Lenders will keep growing their e-commerce capabilities to streamline operations and improve client relations.

8. Cybersecurity will be essential.

The pandemic forced us to move many of our transactions and interactions online. This has enhanced the need for heightened cybersecurity measures to keep our data safe.

Many companies will need to invest in IT infrastructure to enhance their cybersecurity capabilities. Good security protocol provides peace of mind for customers and employees, making it an essential investment for most businesses.

9. Many businesses are poised to make major purchases.

Although 2021 is still uncertain, companies are becoming more confident, and many are looking to make smart investments. Some plan to invest in software to boost their remote capabilities while others are ramping up for post-pandemic economic growth.

Overall, business investment is expected to grow by nearly 8% this year thanks to this uptick in spending. Smart business owners will think ahead and stay ahead of the curve by making important investments early on.

10. More companies will acquire equipment through financing.

Most businesses took a financial hit during the pandemic, causing them to realize the importance of keeping cash on hand for emergencies. The Federal Reserve has also lowered interest rates, allowing companies to borrow money more easily. Therefore, more businesses will likely choose to finance their equipment purchases in 2021.

READ MORE: Why Your Business Should Keep Cash Reserves

If your company plans to finance equipment this year, be sure to look for a trusted partner like GLFS. Contact us to learn more about what to expect in 2021 and how we can help your business prepare for the year ahead.