Worried you won’t get approved for equipment financing?
Being turned down by a lender is frustrating. Fortunately, getting declined by one lender doesn’t automatically disqualify you with another.
Keep in mind: Your application doesn’t need to be perfect. However, the more strengths you have in each area, the more likely your credit package will qualify for approval.
To help your application for equipment financing, we’ve put together a quick guide to make your application the best it can be.
That way you can feel confident when you’re ready to submit your application.
In this guide…
- Five Ways To Improve Your Chances of Getting Approved
- Frequently Common Reasons Why Applicants Are Declined
- Get Fast Answers From A Financing Consultant
Five Ways To Improve Your Chances of Being Approved*
* Implementing any or all of these suggested methods does not guarantee a credit approval. All deals are subject to credit review and Beacon Funding’s formal approval process. Several factors are taken into consideration within the credit review process.
Clean Up Personal Credit Issues
Is your personal credit less than perfect? You can request a free credit report every 12 months at https://www.annualcreditreport.com/index.action.
Request, review, and check your credit reports for any mistakes or discrepancies. You may have to file a dispute if necessary. Or if you have a past debt that’s weighing you down, contact the creditor and try to settle or pay down the outstanding obligation.
You can’t change past credit issues, but you can show that you’ve done your best to settle those in an effective manner. Rectifying past credit transgressions helps to show the lender you are different today than you were yesterday, which may increase your odds of approval.
Already own an asset? Putting it up as collateral may strengthen the overall quality of your credit package.
If you already own valuable and essential equipment outright, you can leverage its value to secure your financing. Best of all, you retain possession of your pledged collateral to continue making you revenue for your business.
Get a Co-Signer In Good Standing Credit
Know someone with a stronger financial profile? Ask them to help you qualify for equipment financing by agreeing to be a cosigner.
Lenders want to ensure loans will be paid, so adding another responsible person to the agreement will reduce your risk. Ask a family member, spouse, or associate that’s close to your business.
Adding a co-signer with significant credit issues or large debt obligations will not be considered a strength. Ideally, your co-signer should have similar or better credit.
Put More Money Down
A lot of lenders will work with you if you opt to put a larger down payment on your agreement.
If you’re eager to get equipment fast and take advantage of a growth opportunity, then the cost of a lost opportunity may be greater than putting more money down. Take a look at your cash savings and see if spending more on the initial cost of your agreement benefits you in the long term.
How do you know if putting more money down works for your business? Talk with your financing consultant about how they can help your situation
Reduce the Amount You Borrow
There are benefits to purchasing both new and used equipment. One of the benefits to consider when purchasing used equipment is that it will generally be sold at a lower dollar amount. Let's look at how that could help you get approved.
When a lender is considering financing a purchase for your business, they will take into consideration the amount of the loan. If your business and personal credit don't have pay history for loans of a similar dollar amount, it increases the risk, therefore reducing the chance of an approval. By reducing the purchase price, in this example by purchasing used equipment, there may be a stronger chance of your deal getting approved.
If you find a used equipment model that works for you – even from third-party private owners – Beacon Funding can finance it. Talk to your financing consultant about what they can do to find the right equipment deal for you.
Frequently Common Reasons Why Applicants Are Declined
Was your application denied? Some general reasons for applications being historically denied include:
- Lack of personal or business credit history
- Excessive outstanding loan balances and credit utilization
- Poor payment history and charged-off accounts
- Issues with equipment or collateral being financed
- Repossession, liens, and bankruptcy on file
- Negative bank balances
Get Fast Answers From A Financing Consultant
Have questions about increasing your odds of getting approved before you submit an application? Contact 800.866.6396 or talk with your equipment financing rep to get fast answers.
Implementing any or all of these suggested methods does not guarantee a credit approval. All deals are subject to credit review and Beacon Funding’s formal approval process. Several factors are taken into consideration within the credit review process.