Starting your own business can not only be emotionally draining, but also financially! At one time obtaining start up business financing only required a good business idea and good credit. But now banks are very wary of new businesses due to the high rate of defaults. A start up business that has sufficient working capital to get it thru its first 3 years of business is extremely rare. Keeping their working capital liquid and not tied up in equipment is essential for a start up to be successful!
Why Choose Equipment Leasing
Equipment leasing has a lot of benefits. One of the biggest is the fact it won’t impact your working capital while still allowing you obtain the best equipment for your business. Our start up business equipment leasing program allow us to finance equipment up to $100,000! Imagine still obtaining the equipment your business needs while keeping $100,000 worth of working capital liquid, and available to be used in the day to day running of your business.
Build Business Credit
Equipment leasing companies offer various payment terms. From 24 – 60 months. In our humble opinion, the best term for a start up business is 36 months. Because start up equipment leasing is considered high risk (just like start up business loans are), they are more expensive than what an established business would be offered. 36 months give you enough time to pay off the equipment and build up your business credit. 3 years is long enough for banks to see how you handle your bills. The next time you look for business financing will be a lot easier once you have established your businesses credit.
Freedom from obsolescence
Purchasing an equipment ties up your funds. After a few years, new models of equipment would be out in the market and the ones you bought can become obsolete. When you lease equipment, you can choose the option that allows you to return the lease at the end of your lease term.
Compared to traditional bank loans, applying for an equipment lease is easier and quicker. Although having an excellent credit history is an advantage, credit is not really a requirement for approval. We have several programs for start up business owners with bad credit. In general you will need:a
- 1 page application
- 3 months bank statements
- 1 page letter talking about your business and experience in the industry
- if you have bad credit you will need to include a letter of explanation for your credit problem
- if you need more than $20,000 be prepared to submit your latest tax return
- invoice for the equipment you want to purchase or a list of the equipment you want to purchase
Once you submit your equipment lease application, it usually takes 24 hours to get approval. Once you are approved lease docs are usually emailed to you. The whole process can take 3 – 5 days.
Low Down Payment Requirements
Most leasing companies will want 2 monthly payments held as security . If you have good / excellent credit it can be just 1 payment down.
Frees Up Your Working Capital
Equipment leasing gives you the freedom to use your available cash for things like payroll, inventory, and the day to day cost of running your start up business.
The business loan expert, Irish Taylor, has been with start up business owners since 1992. She has been inspiring entrepreneurs and small business owners with start up business financing ideas and techniques.