Many start ups construction businesses are using equipment leasing to obtain the equipment they need without depleting their working capital. Equipment leasing is relatively easy for a start up business to get approved for, as long as you contact the right equipment leasing company! Not all equipment leasing companies will finance a startup, so you have to make sure they do before you submit an application.
Acquiring a business equipment lease would be a lot easier if you know the leasing company’s requirements. If you need construction equipment leasing, the following advice will surely come in handy:
Check your credit report :
Anyone seeking ANY type of financing should start off with looking at their credit report. As a start up business owner, you must understand that banks will look at your personal credit rating . Its best to correct any errors you find BEFORE you contact a bank. Order a copy of your credit report in advance so you can see where you stand. If you see any problems. Fix them before applying. Start up business financing is considered high risk. If you have been seeking financing, I’m sure you have noticed the rates are higher than the rates offered more established business. That rate becomes even HIGHER if you have bad credit.
Get Your Finances In Order
Be prepared to show your financial strength. For equipment leases under $30,000 having good credit is usually enough to get approved, even for a start up. At most they will want to see 3 months bank statements, to make sure you have working capital and the financial backing to make it thru your start up phase. For leases above $30,000 (for start up businesses) the leasing company will probably ask for your last years tax return (personal) and a personal financial statement.
Whats your experience level?
If you have experience in the industry, prepare a quick 1 page summary of your experience. If you have contracts you are working on, let your leasing company know! Show them how with these contracts, repayment will be easy.
New Or Used?
Are you busying new or used equipment? If its new, you just need an invoice from your vendor. If its used, are you buying it from an accredited equipment vendor or private party sale? If its a vendor, no problem. If its a private party, make sure the leasing company you are working with will approve a private part sale. Not all leasing companies do. Regardless if the construction equipment you want to lease is thru a equipment dealer or thru a private party, if its used be prepared to submit an condition report at some point during the transaction. Most leasing companies also like to get pictures of the equipment.
Construction Equipment Leasing With Bad Credit
Starting a business AND having bad credit classifies your business at the highest risk level. You should be prepared for that. Obtaining financing under those circumstances can be like an up hill battle. Things you can do to help improve your chances of obtaining financing:
- If possible, get a strong co-signer
- If you can’t get a co-signer. Show how financially strong you are. You may be asked to provide 6 months of bank statements. Business and /or personal. If you have contracts that you need the equipment to fulfill, include it with your lease submission
- If you already have construction equipment that you own out right (not on a lease or a loan) you can use them as additional collateral to secure your lease.
The business loan expert, Irish Taylor, has been with Startup Business Loans since 1992. She has been inspiring entrepreneurs and small business owners with start up business financing ideas and techniques. Through the years, she has helped provide clients and people with solutions to loan and credit issues related to new business financing, SBA loans request and new business loans.