Start Up Business Loans

WASHINGTON–(BUSINESS WIRE)–The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-25), which reports economic activity for the $650 billion equipment finance sector, showed overall new business volume for April declined by 42.5 percent when compared to the same period in 2008. Month-to-month new business volume decreased 12.8 percent from March to April, from $4.7 billion to $4.1 billion.

The MLFI-25 is the only index that reflects capex, or the volume of commercial equipment financed in the U.S. The MLFI-25 is a financial indicator that complements other relevant economic indices, including the monthly durable goods report produced by the U.S. Department of Commerce, which reflects new orders for manufactured durable goods, and the Institute for Supply Management Index, which reports economic activity in the manufacturing sector. Together with the MLFI-25 these reports provide a complete picture of the status of productive assets in the U.S. economy: equipment produced, acquired and financed.

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Startup Business Loans

Financial resources play a crucial role in the success of every business.  Without sufficient financial support, it would be very difficult for a business to survive in the industry.  Fortunately, commercial business loans are available for all aspiring entrepreneurs who need funding assistance particularly in starting up the business.

What do you need to know about commercial business loans?  Is it really necessary to obtain a commercial loan even if you already have your own funds?  What are the advantages about obtaining commercial business loans?  Let’s answer these questions one at a time.

Benefits of A Commercial Business Loan
What is the advantage of taking out a commercial business loan?  Primarily, a business loan enables a new entrepreneur to bring those brilliant business ideas to life immediately.  Having available funds prepared makes it easy to execute business plans without delays.  A commercial business loan is a traditional financing assistance that has been used and proven by successful business owners around the world.

It is important to remember that you can’t expect to see profits or enjoy profits immediately after opening up your business.  You may need to wait a few months before your business can establish its footing in the market.  If you think that a small budget is enough to start a business, you’ll soon have to learn that you’ll encounter financial challenges as you run the business.  With a commercial business loan to back you up, you can be assured that you have a reliable financing resource by your side.

Applying for a commercial business loan
Generally, commercial business loan lenders require a business plan to be submitted by their applicants.  If you haven’t created your business plan yet, you should start making one before applying for a business loan.  What information should you include in your business plan?  A business plan is an outline that tells the nature of the business, the type of business you own, the products and services you offer, your target market, your current financial standing, and other details about your business accounting.  Your business plan often determines whether your proposed loan would be granted or not.

Commercial business loans often require that collateral be submitted as a security for the loan.  Your home property, assets or commercial property can be submitted as a security for the money you borrowed.  And since your property is on the line, every business owner must take his payment obligations seriously.

A bad credit history or low credit score can cause a rejection of your business loan application.  There are commercial business lenders who offer loans for bad credit but they usually come with higher interest rates and costs.  Thus, applicants with good to excellent credit scores can expect to have better deals when applying for a commercial business loan. 

Upon approval of your commercial business loan, be prepared to take on your payment obligations.  Don’t forget that the success of your business depends on how well you keep up with your payments to your lenders.

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Equipment Lease for Start Up Businesses

New Business Credit

May 21, 2009 - The Wright County Board of Supervisors have decided to let the Secondary Roads Department do their own mowing with leased equipment for at least the next three years.

Following a public hearing, which is required by Iowa code for this type of decision, the Board voted to sign a lease agreement with Diamond Mowers of Sioux Falls, South Dakota. For $13,020 annually for three years, the county will lease both a new 7130 John Deere four-wheel drive tractor and a 120 foot twin rotary mower (back and side). It will include a three year parts and labor warranty on both units, with Wright County having the opportunity to purchase the equipment any time during the lease. At the end of the lease period, the county can buy it out or enter into a new lease with new equipment.

"The company does business throughout the Midwest," said Waid. "Their mowers are a good piece of equipment, and I’m very satisfied with what they do."

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Startup Business Credit

Equipment Lease Financing

Leasing equipment is a practical option for any type of business.  Business equipment which can be leased ranges from a simple cash registry to more complex types of machineries; from a regular car to large trucks and vehicles.  Although, the procedures in obtaining business lease can be easy, there are some things you must consider before submitting your application.

Here are the factors that affect your approval when leasing business equipment. 

How’s your credit status?  Large corporations and companies who have been in the business for some time will not have a problem getting approved.  But if you’ve just started up your business, you would need to have a good credit report to back you up.  If you have a low credit score and have just started up your business, you may have a hard time getting an approval.  Thus, it is always recommended to check on your credit report and do the necessary steps to increase your rating before submitting an application for equipment lease.  If you already have a separate account for your business, make sure that you don’t have any outstanding balances with other creditors.

Have your documents ready.  Generally, all business equipment leasing companies will require documentations on the types of equipment you need, the nature of your business, your credit history, business partners, and references in the business. 

When it comes to references, it is better to provide as much references as possible to your lessor because it proves your credibility and ability to pay as a business.  To be on the safe side, make sure that you did not have past conflicts with the references you will include even if these conflicts have already been settled.  Past conflicts can also create a negative impression. Preparing for these documents in advance will save an enormous time with the processing of your application for equipment leasing.

Shop around for rates.  Leasing companies do give free quotes on their services.  Make sure that you take several leasing companies into consideration before choosing one.  Knowing the rates offered by different companies will give you a more accurate idea on how much you should ask when negotiating with your chosen lessor.

Examine your business’s financial status.  Look through your business account and study carefully the status of your finances.  Give special attention to how your existing loans and if you’ve been able to keep up with all your payments.  This will help you decide which leasing terms and which type of equipment will be best for the current status of your business.

Seek legal advice.  When signing up for a contract, it is best to seek advice and assistance from a credible attorney to take a look at the legality and validity of the leasing contract.  Remember that a contract binds you to your obligations on all terms that you’ve signed.  Taking this extra step even if you’re rushing to obtain your equipment lease will ensure that you will not have any serious problem in the future.

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Equipment Leasing for Start Up Businesses

A Salt Lake City construction equipment dealer has sold its John Deere and Hitachi business to Honnen Equipment Co. of Commerce City, Colo. Terms of the sale weren’t disclosed. Scott Machinery, a construction equipment dealer that had eight locations in Idaho, Wyoming, and Utah including one in Orem, divested part of its business to focus exclusively on selling and leasing new and used Bobcat compact industrial, construction and agri-business equipment, and provide parts and repair services. It will also continue to be an Ingersoll-Rand equipment dealer. 

Jeffrey Scott, the company’s vice president and Wasatch division manager, said the move is part of a growing trend of consolidation among construction equipment dealerships nationwide.

Proceeds from the sale will be used to recapitalize the business, he said.

Even though Scott Machinery’s sales declined in 2008 because of the housing slump and ongoing recession, Scott said the company hopes its business will improve with its move to being an exclusive Bobcat dealer.

"The compact equipment business segment is a strong and growing segment in the construction industry," Scott said. Compact equipment comprises smaller utility equipment such as mini excavators used in road building, mining and landscaping.

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Equipment Leasing

If you have plans to apply for business equipment leasing, read on the following tips on how you can get a fast approval from your equipment leasing application:

Prepare all necessary documentations.  Don’t waste your time looking for the required documentations just when the leasing company is already asking for it.  Know in advance which types of documents are needed even before you submit your leasing application. 

Generally, you’ll need to prepare a business plan, a history of your company, description of your business, a list of the equipment you wish to lease, your credit report, references for your business, etc.  Your business plan should include your projected expenses, earnings and lease payments in case you obtain approval for your leasing. 

It will also save you a lot of time if you let a Certified Public Accountant prepare a financial statement for the past years of your business.  To be sure, you can call your prospective leasing company and ask the exact details about the paperworks needed.

Request and review possible quotes.  Consider all your options before choosing a particular leasing company.  Make sure that you’ll get the best rates by requesting for possible quotes and reviewing each one carefully.  This will help you compile your equipment leasing request better.

Provide a number of credible references.  Leasing companies appreciate it more if you give as many references as possible.  Don’t include former clients if you have a history of conflict or complaints with them.  Even if the matter has already been resolved, it can still have a negative impact to your business’s name.  This shows your capability to pay and sincerity as a borrower.  Don’t forget to provide the name, complete address and contact number of your references.

Have an attorney review the contract.  Don’t sign up anything without having an expert have a look at the stipulations of your contract.  Remember that any signed agreement is obligatory and you will not want to be bounded with unreasonable terms just because you did not check the document when you signed it.

Check your business’s credit history.  Make sure that your business account is free from past due debts and conflicts from any creditor.  You need a good credit status if you want to get a fast and easy approval.  If your business has just started, make sure that your personal credit history is excellent and impressive.  If you have present problems with your credit report, do the necessary actions first to improve your credit status.

Consider paying through ACH Debiting.  ACH Debiting is an arrangement between you,  your bank and your leasing company where your lease payments are automatically deducted from your account each month.  This type of arrangement is ideal because it prevents the possibility of delaying or missing your payment dues.

As much as possible, make way for actions that will enhance your credit.  You can enhance your credit status by obtaining more assets and investing in bonds or stocks.  These will greatly boost your credit rating and make it easy for leasing companies to grant you approval.

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Milind Sant thinks he has a business idea that could detect diseases earlier and provide more accurate health assessments that could save lives down the road.

Sant is chief executive officer and co-founder of LipoSpectrum, a firm that licensed technology from Washington University in St. Louis that can analyze lipids to detect risks for disease and provide a more accurate picture of an individual’s health than some older technologies. He has been ready to launch his company for the last year, since he left a post with Washington University.

Sant’s idea has even received approval from the Economic Development Center of St. Charles County for equipment funding, but there’s one problem that, for now, has Sant stopped in his tracks.

Banks won’t grant him a loan.

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Equipment Lease Financing

Start Up Business Equipment Lease

When applying for an equipment lease, some businesses fail to review the terms associated with leasing.  Usually, a business is in need of a set equipment to immediately start production or manufacturing.  Rushing to get an approval, signing a contract can be taken for granted as long as the lease has been approved.

Let’s discuss the most common mistakes that businesses make when obtaining equipment lease.

Very short contract of agreement.  A contract of agreement should contain all the terms and obligations that apply to your equipment leasing.  It should clearly stipulate all conditions that have been agreed upon by you and the equipment leasing company.  If the contract of agreement is very short, terms may not be clearly explained and some matters may be left unaddressed

For instance, issues about the software transaction may be left unclear.  Since some equipment requires software installation and support, you need to be clear about this in order to avoid future misunderstandings.  Another issue that should also be included in the contract is with regards to certain provisions if in case the company goes out of business.  Because all these matters are important, a contract needs to be complete, clear and unmistakable. 

Details about the performance of the equipment.  As the borrower, you need to make sure that the equipment you will obtain will be capable of handling your workload.  These details must also be contained in the contract as this will serve as your protection against unsatisfactory equipment performance.

The question of support and accountability.  It is the duty of a leasing company to provide support for its customers.  However, if the exact responsibilities are not clearly defined, this may cause some problems after the leasing contract has been signed.  It is possible that the leasing company will not provide the support you need or pass this responsibility to someone else.

Think about your long term goal.  When leasing equipment, some businesses forget to think about what types of equipment will be able to support them for a longer term.  Instead, businesses often make the mistake of leasing pieces of equipment that will help them start up or launch a new project.  To get the best results, consider the long term goals of your business when choosing the pieces of equipment you wish to lease.

Miscommunication.  Any type of deal requires open communications from both parties.  Without clear communication, there is a greater tendency that conflicts will arise sooner or later.

Not seeking legal advice.  Seeking advice from a legal consultant or an attorney is often overlooked by businesses, especially small businesses applying for lease.  Although an attorney may cost additional fee, it will still work to your advantage.  An attorney can guarantee that all terms and conditions that you will be signing are reasonable and satisfactory.

These are just some of the most common mistakes that businesses commit when leasing equipment.  These can be avoided by taking the extra time to check and understand the contract before signing.  Doing so can save your business from possible problems in the future.

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Equipment Financing For Start Up Businesses