Yesterday we covered some bullet points for what an ideal applicant looks like if you are an existing business. What if you’re new, though? What if you’re just trying to get your feet off the ground and you need commercial equipment to get it done? Well we are happy to say we can help you, too! Our ideal applicant in that situation looks just a little bit different:

• The personal credit score of the owner(s) should be a minimum of 700. This score represents the past history of a person’s ability and/or willingness to pay financial obligations in a timely manner. This score is used by lenders to try and determine the financial risk of lending money to these individuals.
• The net worth should be two to three times the amount of financing requested as listed on the applicant’s Personal Financial Statement and supported by bank and liquid asset statements. An individual’s net worth is calculated by determining the total assets of the individual and then subtracting all of the liabilities of the individual. The net worth of a business is calculated by calculating the total assets of the business and then deducting the total outside liabilities of the company.
• Lenders will have different credit criteria for the owner of an existing business opening an additional location as compared to an applicant seeking to open an entirely new business.
• Income, financial reserves and personal collateral sufficient to solve the unexpected problems and fluctuations that affect all businesses. Many lenders prefer loaning money to businesses that have cash reserves sufficient to properly meet at least 180 days of financial obligations.
• Personal investment in the project to equal an amount up to 40% of equipment and build-out costs.
• Available revolving credit must be 70% or more. Revolving credit does not have a predetermined number of equal payments unlike installment credit loans. Revolving credit is most typically associated with credit cards.
• Bankruptcies and/or tax liens are problematic.

Wondering you qualify? We’d love to talk to you today! Head to our website, fill out a short form, and we’ll get in contact with you as soon as we can!

Many businesses today find it challenging to obtain the financing they need for the commercial equipment they want in order to grow and/or remain competitive in their markets. To help business owners navigate through today’s financial markets, we are pleased to provide the following guidelines:

If You Are An Existing Business:

• A minimum of 2 years ownership is required. Even if the business has been in operation for many years, most lenders will still require that current ownership have been the owners for at least the last 2 years.
• The personal credit scores of the owner(s) should be at least 650. The credit score represents the history of a person’s ability and/or willingness to pay financial obligations in a timely manner. This score is used by lenders to try and determine the financial risk of lending money to an individual.
• The business PAYDEX score should be at least 65. Paydex is a term used in business and it is a numerical score granted by Dun & Bradstreet reflecting the timeliness of the businesses’ payments.
• A track record of profitably owning and operating the same sort of business is very important.
• A cash flow sufficient to make the loan payments made evident through business bank statements.
• Personal income proportionate to the amount requested to finance.
• Available revolving credit must be 60% or more. Revolving credit does not have a predetermined number of equal payments unlike installment credit loans. Revolving credit is most typically associated with credit cards.
• Bankruptcies and/or tax lines are problematic.

Do you have questions? We’d love to talk to you TODAY and get you a free quote!