Equipment, New And Used, Leasing And Financing Update

For equipment, new and used, leasing and financing in 2009 and the early part of 2010, economic times were no different than most United States Industries.

Even though we are going through tough credit times, financing and leasing is still available for the good credit applicant and not the so the good applicant. We are going to discuss the available  financing and leasing programs in general to give you an idea that money is still available for start up and seasoned businesses.

First we are going to start with the applicant with great credit. That would be an applicant with 680 or higher credit and time in business that exceeds three years. The applicant should not have any prior bankruptcies and should have low debt ratios. This applicant can qualify up to ,000 to ,000 application only programs. Additionally, this gives the good credit applicant a good opportunity to acquire a great lending rate. If the applicant seeks more than ,000 to ,000, they will have to provide more documentation to qualify. This would include two years prior years business and personal income tax returns and the summary page of your last three months business bank statements.( high average bank balances are looked at favorable)  A personal financial statement might be required as well as interim financial statements. A copy of the invoice detailing the acquisition would be required as well..

Applicants with personal credit scores between 650 and higher still have a good opportunity to acquire their desired acquisition. They should have a minimum of three years in business without prior bankruptcies. Low debt to income ratios are also looked at favorable. Additionally, some lenders still might offer application only programs and anything beyond the minimum application only levels would require the same documentation as above.

With the second tier credit described above, the rates will be slightly higher than “A” Credit with great financing and leasing opportunities available.

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Applicants with Credit scores between 600-650, there are many lending programs available without perfect credit. Even though there may be some dings on the applicant’s credit, there are still financing and leasing opportunities out in the financing market. There won’t be application only programs but plenty of lenders will look at you. Once again, strong healthy bank balances with time in business with profitable operations showing on your tax return is a big plus… Usually, full documentation information is required. The front money in these financing programs can run anywhere from 10-20% where as the first two programs can run as low as the first two payments..

There are other lenders that are not credit driven, but are story book driven. They work with start ups and seasoned businesses without perfect credit. They are more cash driven, and require some additional requirements to qualify. These lenders rates are higher than the programs described above but gives the applicant options that might be available elsewhere..

There are other lenders that are not credit driven at all but look at the free and clear assets that are available to the lender. Most lenders like bulldozers, trucks, excavators, etc that have retained a good value. These are cash poor applicants but have good qualified assets that the lender will qualify. These lenders have their own formula to work out a lending base. One should call to find out the particular details (Copies of free and Clear Titles are required)

 In this recession, many lenders have had to focus on their repossessed inventories instead of normal business due to cash flow demands, out of balance credit lines with their own lenders, and competing with other lenders for the small supply of buyers in the market place.

In the prior better times, there were many application only programs up to 0,000 and 0,000. This meant there were no financial statements, tax returns or bank statements required. Today, there are less application only lending programs available, or the available programs require more information and their rate factors are higher than before. Due to problems in the industry, many lenders have gone back to more conventional lending requirements. .

These lending changes have a tremendous impact on normal business for marginal credit buyers, start up businesses and more mature businesses. One interesting area that has arisen out of this economic downturn is dealer/special financing. With all the repossessions in the market place today, buyers still have a unique business opportunity to acquire a repossession with a credit score as low as 550. Repossessions can be obtained with very little or no money down, sixty months to repay, regardless of age, and more favorable financing terms than conventional financing.

Since new business capital is difficult to obtain, it is suggested that the start up and seasoned business examine the repo markets. This could be a rewarding in the combination of both price and financing.

The following types of industries are examples of what we are describing here for equipment leasing and financing construction trucks and equipment, work and commercial vehicles, over the road trucking including Semis and big rig Trucks, commercial trailers including flatbed, bottom and end dump, dry van etc and all types of construction equipment, backhoes, excavators, bulldozers, dump trucks, farm equipment, forestry equipment, heavy equipment, garbage trucks, concrete, cement and boom trucks, office and medical equipment

If conventional isn’t available to you for whatever reason, please check out the repossession market and see what deals you may be eligible for.

Happy hunting for your equipment leasing and financing needs.

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