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Why would anyone choose a non-bank lender?

We get our funds from a bank just like you. The difference is that ours is a commercial relationship – so our rates are much lower than an individual’s. Nonetheless, we are not in the market to compete with the bank on rate. If rate is your only concern and your bank will approve you there are only two ways to get a better deal:

a)       Change banking relationship (go to another bank) – this may require you to move your accounts over with you!

b)      Buy brand new from the manufacturer/dealer financing – this may require you to pay a hefty markup for brand new equipment.

So, if we’re not cheaper than the bank on rate – why would anyone go with us? Fortunately, for lots of reasons!

a)       When the bank says no – banks lend based on rigid criteria – commercial credit scores, financials, and other qualifying standards that exclude a lot of smaller businesses.

b)      When it’s outside bank policy – certain equipment, especially used equipment, and certain industries – trucking, logging, construction – can fall outside bank policies.  The bank can’t be all things to all people, but we have very few age or industry restrictions, so we can usually help when the bank can’t. If it’s worth it for you to save on equipment markup by moving on a good deal on used equipment – we can help you realize those savings with financing.

c)       Commercial credit not required!  That’s right. We can leverage a combination of time in business, personal credit, cash flow, industry, and other factors to offer approval even if you have never borrowed in your business name before.

d)      We don’t report to your personal credit – In 99% of cases, we do not report your account with us to your personal credit bureaus, so it never shows up as personal debt. This means we won’t interfere with your ability to get a car loan, refinance your house, or pursue other consumer financing.

e)      We don’t take a lien on all of your business’ assets.  Most banks file what are known as blanket liens.  These are liens on all of your business property to secure a credit line and all other loans and accounts with them.  We only take a security interest in the equipment you’re financing – so if something goes wrong, we don’t own your business, just the machine in question.

f)        We help you save your bank relationship exposure for something larger or more important.  Most banks have a total exposure limit – the maximum amount they can lend to a business or individual in your situation. Often, individuals and businesses need this exposure for operating costs like credit lines to help finance the costs of running the day to day business. When you use the bank for capital expenditures instead of operating costs, you hurt your ability to access their cheap money for the day to day stuff that has a lower return on investment. Most equipment can generate much more revenue than its payment – even if you pay 10 or 12% instead of 6%, but if you lose the ability to access bank money for operating costs and have to borrow those funds at a higher rate elsewhere – the ROI is much lower. Payroll, inventory, insurance, and other operating costs have lower returns than a capital expenditure.

g)       We offer structures the bank doesn’t.  Need a lease with a 10% buyout? A residual built into the contract? Skip payments for seasonal businesses? Annual payments? We have you covered if you need alternative structure.