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Amid Tightening Credit Conditions, Vendors and Brokers Find Opportunities with Alternative and Story Lenders

by Equipment FinancingFinancingVendor Financing

Amid traditional banking’s tightening credit conditions, many business equipment vendors and loan brokers are feeling the impact. Recent updates reported in Monitor Daily’s Q2/24 Bank Credit Pulse highlight several key changes among large banks that are affecting—or should we say restricting—access to funding.

Here’s a closer look at these changes and how GFLS, a full-service direct lender, can help vendors and brokers take advantage of opportunities to get more applications approved and businesses forward.

Five Key Changes in Bank Credit Offerings

  1. Reduced App-Only Offerings
    • Impact: 11% of large banks have reduced the dollar value of their app-only offerings.
    • Challenge: This reduction means vendors and brokers must now gather more financial information from their customers, adding complexity to an already lengthy and burdensome approval process.
  2. Increased Time in Business (TIB) Requirements
    • Impact: 12% of large banks now require a longer TIB, with some increasing from 2 years to 3 years.
    • Challenge: Newer businesses and startups may struggle to meet these stricter criteria, limiting their funding options.
  3. Higher Minimum Deal Size Thresholds
    • Impact: 6% of banks have raised their minimum deal size threshold.
    • Challenge: Vendors and brokers may find it difficult to get larger financing deals approved at big banks.
  4. Stricter Standards for Financial Strength
    • Impact: 19% of banks have increased their standards for historical financial strength.
    • Challenge: This makes it harder for business owner with past financial challenges to get approved.
  5. Reduced Broker Business Volume
    • Impact: 17% of banks are reducing the volume of broker business they entertain.
    • Challenge: Brokers are looking for new funding sources to be a reliable and flexible partner.

How Global Financial & Leasing Services Partner with Equipment Vendors and Brokers

With these key changes in bank credit offerings, vendors and brokers need alternative funding solutions. Here’s how GFLS opens new opportunities:

  • Flexible Funding Options: Unlike the tightening bank standards, GFLS offers more flexible terms that can accommodate a wider range of business needs. As a nationwide lender, we provide equipment-based financing and supply fast, flexible equipment financing to non-investment grade companies—often in days, not weeks. With an average origination of over $180,000 this year and the ability to fund up to a million, we are well-positioned to compete for larger deals that big banks might now turn away.
  • Tailored Solutions: We look at each transaction differently, tailoring solutions best suited to the applicant. Our approval process is handled by a direct decision maker and is based primarily on the applicant’s ability to service their current and proposed debt.
  • Direct Lending with Own Capital: As a direct lender using our own capital, GFLS can offer the flexibility and speed that traditional lending institutions often lack. This makes us an ideal partner for business owners who struggle with equipment financing approval from traditional lending institutions.

Learn more: How Vendor Financing Can Support Your Sales Team

Proven Opportunities with a Proven, Trusted Direct Lender

The GFLS team has been building relationships with brokers, proving the growing need for flexible funding sources. We’re seeing more vendors and brokers seeking partners who can provide the support and flexibility they require to better support their customers’ equipment financing needs. Our team is focusing on this shift, asking vendors and brokers important questions about their current funding challenges:

  • Are you experiencing more turned-down opportunities?
  • How is the requirement for additional financial information affecting your business?
  • Are you aware of how GFLS can help fill the gaps left by traditional banks?

By offering tailored financing solutions, GFLS is ready to help vendors and brokers thrive in this changing credit environment. Bring your financing applicants to us and let’s grow and support business. Get in touch with us.

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How Vendor Financing Can Support Your Sales Team

by Vendor Financing

You invest a lot of time and resources into building a high performing sales team. Chances are, no one understands your customers’ situation and buyer journey better than your sales manager. Yet, changes in the marketplace and buying habits have occurred over the past few years that have some companies lowering their sales forecasts as customers struggle with inflation, workforce stability and supply chain issues to name a few. Others are increasing sales numbers thanks to increased pricing on scarce products and/or customers’ shifting needs.

Either way, sales teams are navigating tricky times. By offering in-house financing through a partnership with a trusted lender, you cannot only better support your team in meeting sales quotas, but also be more attractive to buyers in all credit tiers.

Why are Buyers Turning Toward Vendor Financing?

Traditional lending and financing sources (banks) cater to excellent and good credit applicants, leaving lower tier borrowers empty handed. Should a customer qualify for traditional financing, banks require a lot of paperwork and time to move an application from submission to approval and funding. In today’s fast-paced business environment, time is a luxury that few business owners have. With vendor financing, you can offer your customers more flexibility, especially when you work with a lending partner committed to helping your sales team close sales, like Global Financial & Leasing Services, LLC (GFLS).

Also, vendor financing allows your customers to finance a higher priced piece of equipment rather than settle for a lower priced alternative to stay within an amount for which they know they can get approved by a bank. This is a win-win for your sales team because a higher sales price results in a higher revenue per sale and your customers since they gain the equipment best suited for their needs.

Should a customer decide to finance an equipment lease, there is the potential for tax benefits through Section 179.

Why are Companies Turning Toward Vendor Financing to Increase Sales?

In-house financing through a reliable, trusted partner is a sales conversation starter, as well as a way to continue negotiations. If your sales team has a difficult time selling equipment at sticker price, an in-house financing program opens the door to discussing what monthly payment is affordable.  

It’s critical to your financing program’s success to partner with a lender who gives you control over how your customers’ purchases are financed. Global Financial & Leasing Services (GFLS) will tailor a financing program that works for you and your customers—one that includes all credit tiers, allowing you to offer a complete solution, which not only attracts buyers, but also helps retain them.

As we mentioned above, few of your customers want to waste time shopping around for essential business equipment. By having a financing program in place with a lender who is committed to quick turnarounds, your customers’ applications will be handled quickly. For us, that means two to 24 hours.  

Talk to our team about how the right financing program can help support your sales team. GFLS works with you as a primary or secondary financing partner. Our strong connections to publicly traded financial institutions means you can expand your target customers from “A-type” credit applicant’s to “B-type” and “C-type” credit and startups. In the end, your sales reps can focus on closing sales, not finding financial solutions.

Submit an Equipment Vendor application today. If you have questions, contact our team for answers.