I spent the better part of this year blogging about “ten reasons why equipment financing companies are better than the bank”. For a quick refresher, here’s the list, along with a comment or two.
- SIMPLICITY – We keep things simple – the bank doesn’t.
- UPFRONT COST – Our upfront cost is definitely lower.
- COLLATERAL – We have less restrictive collateral requirements
- COMPENSATING BALANCE – You need not keep a large bank balance.
- FINANCIAL STATEMENT COVENANTS – Your ongoing finances are your business, not ours.
- PERSERVING CREDIT AVAILABILITY – Hey, if you want to use the bank later, you can.
- HIDDEN CHARGES – Simply put, we don’t have them.
- ACCOUNTING AND TAX – Accountants sing our praises.
- RATE ADJUSTMENT – Fixed rates are better, and we have them.
- RE-QUALIFY EVERY YEAR – You won’t have to re-qualify for the same loan year after year.
Now, looking at this list, and reading my ten posts on the subject (you HAVE done that, right?), it’s clear that this is almost a no-brainer issue. If you need an equipment lease or an equipment loan, an equipment financing company makes superb sense. The reasons are so strong in our favor; it amazes me the bank does any equipment lending at all. Maybe it’s advertising. Or the lollipops.
People often ask me “why is this so… why can equipment financing companies beat the banks so easily?” I think they expect a long, complicated answer, but truthfully, the answer is simple: financing equipment is our ONLY business. That’s it – that’s all we do. We write equipment leases and the like. And blog a bit, but that’s neither here nor there.
The bank, on the other hand, has their hands in everything. So they are far more restrictive across the board. I can’t say I blame them (boy, they took a hit on that mortgage thing, huh?) But their restrictions just make our “easy” way of doing business look better, as outlined in my ten reasons.
Ok, I’m done with these ten. Now I can go back to bugging you about Section 179.