Having poor credit can make obtaining financing difficult. Most and finance companies have a rigid credit guideline that if you fall outside of their norms, they will not extend credit.
Why You Need A Bad Credit Equipment Lease Company
If you are one of the thousands of business owners with a low credit score. You know the difficulties of obtaining financing. Luckily there are companies like LeaseFunders.com who can provide bad credit equipment leasing.
Below are the steps you should follow if your company needs an equipment lease but your credit score has become a barrier. Understand that NOT ALL equipment leasing companies will approve bad credit. So before you apply to anyone, its worth the time to pick up the phone and CALL THEM. Find out what their minimum credit score is for approval and what needs to be submitted. Don't make the mistake that a lot of companies make in applying to leasing companies that will only approve business owners with A / B credit!
The following steps are what the leasing consultants at LeaseFunders.com go thru when looking at bad credit equipment lease request.
1. They ask the client if they know what their credit score is
Prior to applying for a lease, check your credit report and ensure that all your credit issues are already in the past. See to it that all your debts have been paid and that you now are in good standing with your lenders. Most leasing companies will reject your application if the bankruptcy is recent or has just been dispatched for less than THREE years in case you have a record of insolvency.
2. They ask you to explain your credit problems
Be ready to submit a written explanation regarding the negative remarks in your credit report. In precisely the same letter, it'd be best to point out the measures you've carried out to prevent credit issues again and to boost your credit history.
3. They ask about how you intend to make on time payments
Since you have bad credit, they are concerned about on time monthly payments. Generally they will ask for 3 - 6 months of bank statements for equipment leases below $20,000 so they can see how your business is doing financially. If you are a start up business owner with bad credit, they ask for 6 months personal statements instead of business. If you are a business owner that routinely drain their business account then they ask you to send both business and personal! For leases above $20,000 they usually ask for 1 year tax return.
4. Have an idea of what you want to buy and from whom
Sometimes an approval can hinge on the type of equipment it is. Are you buying new or used equipment? Are you buying it from an equipment vendor or did you find a used piece of equipment off of ebay or craigslist?
Having poor credit does not mean you won't be able to obtain funding. The rates will be higher than for a good credit borrower, and the repayment term may only be 36 months instead of 60 months. But bad credit equipment leasing is attainable for most company owners.