Start Up Business Loans

Whether you’re starting up a business or in the process of expanding the business, funding can be a challenge. Applying for a business loan can take time and you may not want to wait too long. Therefore, why not consider equipment lease financing?

For many successful businesses, equipment leasing has greatly helped them in getting the financial assistance they need. Is it really wise to lease equipment? To answer this question objectively, perhaps it’s best to take a look at the advantages that leasing equipment offers for a business:

Equipment leasing frees up your cash flow.
Equipment leasing does not require a down payment. An equipment lease allows a business to pay for the equipment in monthly installments so there’s no need to put in huge amount of money just to get the needed equipment.

If you want, you can also apply for a lease term that enables you to submit your payments on a yearly basis. Thus, you can use your existing finances to support different functions of your business such as the production, manpower or marketing campaigns.

Equipment leasing gives easy approval.
Compared with obtaining a business loan from banks, equipment leasing isn’t too complicated. Most equipment leasing companies will only consider the last six months of your credit history. In addition, leasing firms will require a business plan to be submitted and a list of the equipment you wish to obtain.

Preparing the necessary documents in advance would help speed up the processing of your equipment lease application. Once you have submitted the necessary documents along with your leasing application, you can expect to get immediate approval and get the devices or machineries you ordered right away.

Equipment leasing lets you use state-of-the-art equipment.
Purchasing the latest equipment in the market can be really expensive. As a starting business or as a growing business, you may have a hard time getting sufficient budget to buy these machines especially if you need a lot of equipment.

Nevertheless, leasing gives business owners a one-of-a-kind opportunity. Yes, through equipment leasing, you can choose the latest equipment in the market without breaking your budget.

Equipment leasing protects you from obsolescence.
Devices are constantly modified and better versions are introduced in the market almost on a yearly basis. Purchasing equipment doesn’t give you the leeway to change old or obsolete equipment as easily. By leasing business equipment, you can choose to replace your leased equipment for newer models in the market.

Using only the latest in technology will surely give your business the productivity and the edge over your competitors. To avail of this option, make sure that a "modern equipment substitution clause" is included in your lease term.

Equipment leasing gives an entrepreneur special tax benefits.
Leasing payments are considered as monthly expenses or operating costs, not debt. Thus, it is possible to write them off from your taxes. However, to be sure, it is best to consult matters about filing taxes with a business lawyer or with a certified public accountant.

Read more Small Business Equipment Leasing, is it a wise choice?

Resources for Business Equipment Leasing, Equipment Leasing for Startup Buisness and start up business

Planning on starting your own business? Have been thinking about quitting your day job and focus on your own business instead? Therefore, what hinders you from executing your plan? Are you worried because you don’t have sufficient capital to start up the business? Do you think that your fund is too small to start the business?

If you’ve answered yes to all these questions, let this article help you find a solution to your problem. Here, we will talk about possible business start up aids that you can obtain to push through with your plans.

Business Startup Financing Options

Business Loans. The first option you may consider is to apply for a start-up business loan. Business loans can be secured or unsecured and you can apply for either one, depending on the status of your credit. Since you’re just starting up with the business and have not yet established a business credit, lenders would be checking on your personal credit report instead. If you have an excellent credit rating, you should have no problem getting approved for an unsecured business start up loan. On the other hand, if you have a poor credit score, you can choose to obtain a secured business loan instead.

A secured business loan would require you to submit some form of security or collateral to your lender. A lending company may allow you to use your personal investments, properties or savings as security for your loan. This is done so that just in case you fail to keep up with your loan payments, your lender can use the property or the savings you submitted to pay for the money you borrowed. Although a secured business loan involves risk, many successful entrepreneurs started their businesses with the help of this start up financing.

Small business credit cards. Another option to help you get started is to apply for a small business credit card. If you feel that your start up capital is limited, a credit card for small business can help you allocate your funds more efficiently. For instance, you can use your business credit card to purchase the necessary equipment or materials for your business and save some of your cash to use for operating costs or emergency costs.

Just like with business loans, business credit cards can also be secured or unsecured. If you have an excellent credit score, getting an unsecured business credit card should be easy. You can apply online and get approved within minutes. Generally, it takes 5-7 banking days before you can receive business credit card and start using it.

It is also easy to get approved for a secured business credit card regardless of your credit status. In fact, you can use your business credit card as a tool for improving your credit or establishing your business credit history. All you have to do is submit a security deposit to your account and this would be used in the event that you fail to pay off your credit card debts.

Read more Jump Start your Business with a Business Loan

Resources for Unsecured Business Start Up Loan, new business credit cards and startup business loan

In a business environment, equipment leasing is a recognized method of financing. Many business owners and enterprisers turn to leasing instead of purchasing new equipment and machinery. As a business owner, what benefits can you from equipment leasing? Here are the basics:

Equipment leasing costs less. Compared to purchasing, leasing costs much less and is an ideal option for businesses with small or limited budget. Most lessors do not require down payment. If there is a down payment, the amount required is small and easy on the pocket.

In addition, the monthly lease or rent is affordable even for start up businesses. There’s no need to spend half or a third of your business budget on equipment alone. Through leasing business equipment, you can utilize your financial resource in more ways.

Save your business’s credit limit. Leasing allows you to obtain the equipment you need to start your business operations without using your credit limit. If you need additional funding or cash assistance for future projects and expenses, a healthy credit would easily impress prospective lenders and you can get approved more quickly.

Eliminate obsolescence. Equipment and machines are constantly evolving. Almost every year, you can find a more enhance version of an equipment in the market. With purchasing, you’re bound to the one you’ve bought because you’ve already spent a lot on that particular equipment. On the contrary, leasing gives you the flexibility to exchange the equipment you have for a better one at any time. More importantly, being able to use the latest technology in the market ensures your business’s maximum performance.

Uncomplicated process. Applying for a business loan or an equipment loan can take some time. Not only that, banks and lenders are often very particular about the documents you need to submit. Failing to complete your requirements can cause delays or a disapproval of your application. On the opposite, equipment leasing doesn’t require a lot of documentations.

Typically, you can submit your application online, get a response in that same day, and receive the equipment you leased in a few days or within a week or two. Those with good to excellent credit can take advantage of lower interest rates and better deals from lessors but a bad credit also does not prevent one from getting a lease.

Keeps cash flow steady. Equipment leasing helps keep the business’s cash flow steady. Since you won’t be spending a large percentage of your funds in buying equipment, you can place a larger portion of your budget on your cash reserves. Instead of taking out a loan, you can use your available funds instead to cover up your expenses.

Tax Advantages. Another benefit of leasing is the tax advantage. Purchases are automatically taxed while leased assets can be exempted. Since the equipment remains to be the property of the lessor, leased equipment can be written off from your taxes. Ask your attorney about your tax privileges particularly if you are a homebased business owner.

Not all businesses have sufficient start-up capital.  In addition, not all established businesses have enough money to support all expenses necessary for expansion. So the question is, is equipment leasing the right choice for you?  To answer this question, let us consider the benefits of leasing equipment over purchasing.

But first, what is equipment leasing?  Equipment leasing simply means renting business equipment. Instead of obtaining a loan to purchase equipment, equipment leasing lets you use the equipment and start operating the business without the need for down payment or cash payment.  Payment may be done in monthly installments or yearly payments depending on the type of lease you’ve obtained.

So what makes equipment leasing advantageous over purchasing?  First of all, it doesn’t repress cash flow.  With purchasing, a business is forced to give up a huge portion of its finances to buy expensive equipment.  It can take some time before a business can regain the amount of money used for buying equipment.  On the contrary, equipment leasing allows a business to start manufacturing and managing the business without the need to dispel big cash.  Thus, there would sufficient cash available to support other areas of the business. 

Leasing equipment presents different types of leases for every business.  Those businesses that are operates on a seasonal basis can avail of a “skip lease” where skipping payments during slow seasons are allowed without any penalties.  There is also a type of lease called “step-up” lease where businesses who are just starting up can defer lease payments until the business gains footing.  These are just two examples of leasing terms which are available for a business.  Every equipment leasing company offers different types of lease that each business can consider before taking their pick.

Equipment leases are tax deductible. Lease payments can be considered as a business’s monthly expense which makes it a hundred percent tax deductible. Every business owner who leases equipment should remember this important fact and inquire from their lawyers or accountant on how they can avail the tax deduction.

Another great advantage about leasing business equipment is that it lets you keep up with technology.  Machines and equipment are constantly and continuously enhanced.  A particular device can be outdated or get obsolete in just a few years.  If you purchased the equipment, it wouldn’t be practical to buy the latest model and throw out the money you spent on that equipment.  If you leased the equipment, you can easily trade your current equipment and replace it with the latest model in the market. 

It is also worth mentioning that applying for an equipment lease is so much easier than trying to obtain a loan.  Commercial banks and lending institutions generally have strict policies and procedures before granting a loan approval.  In most cases, an excellent credit history is required to qualify.  A business plan must also be presented in order to get approved.  Equipment leasing companies do not impose such requirements from their clients.  Usually, leasing companies only consider the last six months of an individual’s credit history.

Read More  Is Equipment Leasing The Right Choice For You?

Resources for Equipment Lease for Startup Business

Applying for a business loan can be very difficult if you have poor credit.  Most lenders prefer clients with good to excellent credit history because they are considered as low risk borrowers.  Nevertheless, because there is a big market for bad credit loans, some lenders are willing to extend new credit even to those with poor credit scores.

Secured and unsecured Bad credit Loans

A bad credit loan can be secured or unsecured.  Secured bad credit loans are those that require collateral to make up for the applicant’s bad credit.  In this case, the property submitted acts as a guarantee for the lender in case the borrower fails to keep up with his payments. 
On the other hand, unsecured loans for businesses with bad credit can be acquired without submitting any form of collateral but with higher interest charges.  For those who do not have a property to submit or who do not want to put their homes on the line, an unsecured bad credit loan is an option.

Repayment terms range from 1 year to 30 years depending on the amount loaned and the lender.  Ideally, a bad credit loan with a fixed rate of interest and a longer term is a better choice especially for those with bad credit.  A longer repayment term would mean a lower monthly payment and a fixed interest gives you the security that your payments would remain the same despite changes in the Prime Rate.

Benefits of a Poor Credit Business Loan

What benefits can you get from acquiring a poor credit business loan?  First of all, it gives you the opportunity to obtain the funds you need for the development or enhancement of your business.  Although these loans come with higher rates, you can still get the cash you need right when you need it.

Another benefit is the chance to improve or repair your damaged credit history.  After getting approved on your loan, you can prove your credit worthiness by timely submitting your payments.  After about 6 months of consistent payment, you should be able to see a progress in your credit score. More importantly, improving your credit history would also enable you to qualify for loans with lower interest rate and better deals in the future.

Consequences of a Poor Credit Business Loan

Bad credit loans do offer a great opportunity for business owners.  However, before deciding to apply for a secured or an unsecured poor credit loan, it’s crucial to be sure that you can keep up with your payments.   Defaulting on your poor credit business loan would only hurt your credit history even more.  Aside from this, you’ll be jeopardizing the business since it would be very difficult to get approved for another business loan. 

Do not sign up for any type of loan without taking the time to read and understand the complete terms and conditions of your lender.  See to it that there are no hidden costs that can make repayment more difficult for you.  Lastly, borrow only a realistic amount that you need for your business and use the money with care and discretion.

Read More Getting A Business Loan Despite Your Poor Credit

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Startup Business Credit

Vendor Equipment Leasing Programs

Equipment leasing is indeed an ideal option for many businesses especially those who have insufficient working capital to start with.  About more than 30% of businesses in the US has already resorted to equipment lease financing to support their needs.  However, the success of equipment leasing also depends on choosing the right equipment leasing company. 

Some businesses may think that finding a leasing company with low leasing rates is a guarantee of an excellent lease provider.  But this isn’t always the case.  Although it is important to shop around for rates and consider leasing companies that offer good rates, this factor alone is not enough to ensure that you’ll getting a reliable lease provider.  How can you choose the right equipment leasing company from a number of choices?

Making the Right Choice

Extensive research on your part as the lessee is needed to ensure that you’ll be working with the right lessor.  One of the first things you should look for in an equipment leasing company is the willingness of its staff to answer your questions.  You can only learn as much information as you can if the leasing company gives you sufficient answer. 

A leasing company that offers unbelievably low rates may charge you with unexpected fees once you’ve signed up for the lease.  Thus, it is crucial to be aware about the leasing company’s payment policies.  You should know what exact payments you’ll be responsible for before signing any agreement. 

Make sure that you understand the pricing terms of the lessor, the different leasing types they offer, your options as a lessee, and what types of equipment are accepted.  Be wary about leasing firms which refuses to give the exact details about their company, or policies, or gives vague explanations to your inquiries especially with issues regarding payment. 

It is also important to know that leasing companies differ in the services they provide.  For instance, there are leasing companies that specialize on heavy equipment.  Some leasing companies only cater to specific industries such as agriculture, transportation, health care, and other fields of business.  It will save your time and effort if you narrow down your list of choices to equipment leasing companies that specifically caters to the nature of your business.

Leasing companies can be owned by a financial company, a banking institution, or independent leasing firms.  You can find more independent lessors or small leasing firms  in the market than larger equipment leasing firms.  Don’t try to overlook these companies just because they’re small.  The important thing is to check on the company’s background and reputation.

You can start your search for an equipment leasing company by getting recommendations from your friends or relatives who are knowledgeable in the business industry.  You can also seek advice from your lawyer, your business accountant, and other professionals.  If you know other business owner or entrepreneurs, ask them about an equipment leasing company they would endorse.  The internet is also a great place to search for possible lessors.  Just remember, take the time to research about the company and make sure that you understand what you’re dealing with before submitting that leasing application.

Read More Choosing An Equipment Leasing Company

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Equipment Lease Financing

Invoice Factoring

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.

Read More Financing Your Business with Commercial Business Loans

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Equipment Lease for Start Up Businesses

New Business Credit

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.

Read More How to Get Approved For an Equipment Lease

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Equipment Leasing for Start Up Businesses

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.

Read More Tips On How To Get A Fast Equipment Leasing

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New Business Equipment Leasing

Vendor Equipment Leasing Programs

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.

Read More Equipment Leasing Most Common Mistakes

Equipment Lease

Equipment Financing For Start Up Businesses