How Large Does a Business Have to Be to Get Equipment Financing?

By | August 25, 2020

The classifications we use to describe businesses bothers me sometimes. For example, the Small Business Administration generally considers businesses with less than 500 people a “small business”. Fair enough, but does anyone really think a 450-person company is small? I sure don’t. 

how-large-business-finances-equipment

I also talk to many small business owners who feel the same way – they go to their bank who “specializes in small business lending”, and they are told the minimum loan for the special program is $250k. That’s great and all, but the 10-person landscaping company or 8-person accounting firm was only looking for $65,000. 

For us at Crest Capital, most of our customer base are companies that have between 5 and 75 employees. Yes, some are larger (and even a few are smaller), but that’s the market we serve. So when we say we’re a small business lender, we really mean it.

This is important to discuss from time to time, because of what I mentioned previously. A 12-person company goes for a loan, and it’s implied the company is too small to get favorable rates and terms. Nevermind that their revenues well exceed a million dollars a year, they have excellent credit, and the loan will help them grow even more. 

There’s another small layer to this that I want to mention. The person who owns and runs that 12-person company doesn’t think it’s “small”. In fact, that business is probably one of the biggest things in his or her life. They may have spent decades building it up. 

Even further, of those 12 employees, six of them earn full-time salaries. There are four different families whose mortgages depend on that business. Nine college educations will be at least partially paid from this business. A bunch of automobiles, hundreds of meals out, vacations, and countless dollars wasted on “silly” hobbies (according to spouses)… all of it the result of this “small” business.

No, there is no business “too small” for financing. 

As long as a company is successful, has a few years under their belt, and revenues (and credit) are good, equipment financing is available. Quicker and easier than you think, too.    

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