New businesses, especially those with no credit history, have a hard time securing bank loans. Fortunately, start-ups can use leasing financing to obtain vehicles, equipment, or other assets they need to perform specific tasks. Both established and start-up businesses can use equipment leasing and enjoy long-term benefits.
Reasons to lease equipment
Taking loans to purchase equipment can be a long and tiring process. As a business owner, you want to make sound financial decisions in order to save valuable time. Leasing equipment will allow you to avoid unnecessary delays that can interrupt your business operations. Equipment lease financing, unlike bank loans, doesn’t require down payments. You only need to make your payments in instalments. What’s more, you can choose a flexible repayment plan that matches the financial capabilities of your business. Through equipment leasing, you can use your working capital to replace old equipment, promote your products and services, hire workers, and add to your existing equipment inventory.
You’ll need certain documents to qualify for this financing option. Most lessors require borrowers to provide recent financial statements, as well as written equipment lease proposals. Your lease proposal should clearly define what you need to lease, the nature of your business, and the equipment you need. These details will help you convince your lease provider.
Check your credit score
Some lessors prefer to offer equipment leasing to businesses with good credit history. Nonetheless, there are lease providers who don’t require their clients to provide credit history. Such companies are ideal for credit-challenged start-ups and business owners who’ve been discharged from bankruptcy. It’s not advisable to submit several lease applications to different companies. If one leasing firm notices inquiries made by other lessors, it may reject your application.
Getting approval for equipment lease financing
Not all equipment leasing firms offer leases to new business. Therefore, you want to look for lease providers rendering services to companies that have been in operation for less than two years. Remember to choose a lessor who caters to your kind of business. If you need printers, for example, you should submit your lease application to leasing companies that specialise in printing equipment.
Equipment leasing – where to find out more
If you’re looking at leasing as a way to obtain equipment for your business, read our Business Finance page to find out more about the solutions we can help you with.
Or please get in touch to find out how we can help with your equipment leasing requirements.