Equipment Financing and Equipment Loans: Be Ready to Open Your Books

Neatly filled out Finance Applications come to us on a daily basis for equipment financing requirements. They come from business owners, doctors, chief financial officers and company presidents. The application is sent in yet the supporting financial documents trickle in after and sometimes only part of the needed information is provided. Not all companies operate this way but you would be surprised how many do. With only part of the information, we can only partially underwrite and evaluate a credit profile which leads to an application that sits in limbo.

If you look at the big picture; we’re asking a lender or private equity group, who are complete strangers, to give you money for your project which you normally will not have any relationship with. Why do they need 2 years of taxes and financials? To carefully evaluate your track record and ability to successfully pay back your debt. For the most part, the days of getting money based on what you write on your application are long gone. It makes sense that you have to prove your ability to fully complete your obligation. Even your bank, which many of you have years of relationship together, will ask for current financials and collateral. So why wouldn’t a complete stranger do the same?

Underwriters always tell us, the more information the better. The more detail and proof of good financial performance you can provide, the better the chances of getting a fast approval at the lowest rates. Clients that are hesitant to provide everything requested make us hesitant to move quickly since they are usually hiding some losses or poor performance somewhere. The red flag appears and we know that something is up.

When applying for a business loan, business finance or an equipment lease of any type, be ready to provide a complete financial package with banking information, trade references and listing all owners and partners on the finance application. If there is anything negative in your history, bring it out into the open so underwriting can evaluate it quickly to see how it will affect your potential for approval. Better to deal with any issues right away than to uncover those weeks later and still have the same results.

We are not looking for perfect credit, just full documentation so we can offer you all the potential choices to make the best business decision.