Selling equipment is your livelihood, so how do you sell to customers who lack buying power?
Beacon Funding can help you turn those new relationships into long-term buyers. Selling your inventory with a flexible equipment financing partner can make your equipment more affordable. Plus, you give customers a way to build their business credit through equipment financing.
How Does Business Credit Impact Equipment Sales?
Since lenders typically look at business credit to determine if a company is reputable, helping your customers establish business credit is key to selling them more of your equipment and lays the foundation for getting them approved faster in the future.
Business Credit Helps Your Customers:
1. Acquire More Purchasing Power
A proven pay history can help your customers qualify for larger credit lines. Which means they can afford more expensive equipment or add more units faster.
Let’s say you have a repeat customer looking to add equipment to expand their service offerings. If they already have a pay history with Beacon Funding, their pay history creates a faster approval time. The customer gets to acquire the right kind of equipment, much faster, and without using all their existing cash. While at the same time you increase your sales numbers.
2. Increase Their Liquidity
29% of startup businesses fail because of a lack of capital and cash flow. Since every business needs cash to operate, your customers should be thinking how they can keep money in their bank accounts.
Equipment financing helps your customers afford equipment today without depleting their cash reserves. By building proper business credit, your customers can conserve more cash for a rainy day.
Eventually a business with good credit may be able to borrow more, allowing them to stay liquid and run their daily operation smoother.
3. Protected Personal Credit
Too often Beacon Funding sees business owners rely only on their personal credit to finance equipment. Unfortunately, very few small businesses can scale through their personal credit alone.
As their business grows, your customers can acquire more of your equipment without risking their personal credit. When businesses don’t separate their personal expenses for business-related purchases, they could hurt their personal credit if something unexpected occurs.
By establishing a credit line solely for their business, they can keep prospering professionally and personally.
4. More Competitive Financing Options
As your customer’s business credit builds over time, their reputation with lenders becomes stronger and more secure. This puts them in a position to qualify for more competitive financing options. Beacon Funding can help you reward good paying with deals like 100% financing and buy now pay later.
What Does Beacon Funding Look at When Offering Financing to a Business?
There are five main pillars Beacon Funding looks at when offering financing.
It’s important to note that while most lenders need a business to be strong in all five to obtain financing, Beacon will overlook some areas as long as there are strengths in others. That’s how we can approve more of your customers for equipment financing.
See how Beacon’s wider credit window outperforms other lenders:
Time in Business
Other Lenders: Lenders prefer to work with businesses that have demonstrated a long history of success. Most lenders and banks will need to see at least 3-5 years to be able to offer a new business financing.
Beacon Funding: While having many years in business can give a customer more options, Beacon Funding realizes the importance of building business credit from day 1, which is why we are able to consider all businesses, even if it’s their first purchase! Unlike traditional lenders, you can rest assured Beacon is comfortable working with startup companies to build their business credit.
Corporate Pay History
Other Lenders: Lenders prefer to work with businesses that have a long, successful history of repaying their loans on time.
- Corporate pay history is a measure of how well a business has repaid past obligations.
- Businesses that have paid timely in the past will continue to pay timely in the future.
Beacon Funding: A history showing how a business pays its debts opens up many avenues when obtaining financing for a business. At the same time, Beacon is able to overlook this for younger companies, provided the owners of the business can prove good personal pay history.
Lack of Derogatory History
Other lenders: Historical derogatory events such as corporate liens, judgement, suites, collection, and bankruptcies make lenders nervous. Lenders prefer to work with businesses that do not have a derogatory-free past.
- Most lenders assess more risk to a business that has had financial problems in the past.
- If there are problems, lenders may fear that these issues may persist during the repayment of their loan that may put their debt at risk.
Beacon Funding: While derogatory history can hinder a company, Beacon recognizes when businesses are able to get back on the right track and can work with businesses to find unique solutions to their needs, provided they can demonstrate that the derogatory history is resolved and not an ongoing pattern.
Ownership Credit
Other lenders: A lender would prefer to work with a business in which the owner demonstrates strong credit trustworthiness.
- Many lenders assess more risk to a business whose owner fail to manage their personal credit well.
- Lenders often assume that poor personal credit will lead to poor repayment of their business loan.
Beacon Funding: An owner’s personal credit can definitely be a strength when there’s limited time in business and/or no business credit.
However, Beacon has been able to offer financing to business owners with challenged credit by offering unique solutions in structuring the deal so that the business can still get the equipment it needs.
In fact, Beacon has financed business owners that have a scores as low as 496 on multiple transactions, because they have established good paying business credit, or were able to put a large amount down.
Positive Cash Flow
Other Lenders: In order to view cash flows, some lenders and banks may require full financial packages including tax returns and debt schedules in order to determine cash flow and consider financing.
Lenders typically prefer to work with businesses that maintain higher available balances in the bank account.
- Businesses that have significantly more cash coming into their business than out tend to be viewed as a better credit risk by commercial lenders.
- Businesses with more bank deposits and balances are considered more capable of making their monthly loan/lease payments on time.
Beacon Funding: In most cases, Beacon can determine a business’s cash flow from looking at the most recent 3 months bank statements.
To make it easier on applicants, we can collect their statements from their bank using an automated program called Decision Logic. In under a few minutes, an applicant can have their credit app filled out and bank statements submitted for BFC to review.
How Partnering with Beacon Funding Helps Your Customers Establish Business Credit
When your equipment is financed with Beacon Funding, your customers are working with a lender that reports to credit bureaus on how businesses repay their loans.
Are you helping your customers build a public record of trustworthiness so it’s easier for you to offer them competitive business financing for more equipment?
Let Beacon Funding Help Your Customers Start Establishing Business Credit Today
When a young business is interested in your equipment, why not make things easier for everyone?
Partner with a lender that has your sales and customer’s goals in mind.
If you’re interested in establishing your customer’s business credit history, contact us today and let Beacon Funding be your flexible financing partner.