My last post introduced our new tool for a self-assessment / pre-qualification for equipment financing. And while pre-approval is indeed a common phrase, we, like almost all lenders, do not actually approve any deal before seeing all of the details, regardless of any pre-approval status (plus, we procedurally buy the equipment for you, so the collateral part needs to be in place as well, but that’s for another post).
I wanted to take a moment and go over what customers can expect from our “pre-approval” tool, and how it fits into the equipment financing approval process.
As I’ve discussed in past posts, while the actual approval process is quite intricate and detailed, we have several “big picture” parameters that serve very well in giving us (and customers) a fairly accurate picture of whether a company can qualify for credit. The big picture parameters are time in business, revenues, whether a company is profitable, and how good their credit is. Our tool takes all of these into account, and if you pass these parameters, you are “pre-approved” subject to remaining requirements.
But there are other, deeper parameters that could upend any pre-approval status. The equipment type will matter to a degree, as will the industry your business operates in, the overall dollar-size of the transaction, and so on. These are questions our tool does not ask, because the answers do not lend themselves to a black and white “yes or no” response. What I mean by this is we generally do not finance companies within industry XYZ, but there are exceptions where we do. Or we generally do not finance equipment type ABC, but again, there are exceptions.
(Note: I am purposely staying away from mentioning specifics here because again, there are exceptions. Suffice to say, 95% of industries and 95% of equipment are just fine.)
The above stated, our pre-approval tool has proven to be very useful, and our customers love it as well. It gives them a great idea of where they stand in the equipment financing approval process, and that makes for a better, easier process all the way around.