But today we’re going to discuss Financial Disclosure Equipment Financing. This is where the lender needs more information to make a credit decision. In the case of Crest Capital, it’s typically because the loan amount is greater than $250k – once the amount borrowed exceeds that, we will need more information.

(note, as I went over last time, that $250k threshold is ours. Some lenders, like many banks, may require Financial Disclosure for any amount.) So let’s go over what is typically needed with Financial Disclosure Equipment Financing.

Financial Disclosure Equipment Financing

For financing larger amounts, lenders will need more information, particularly on the operations and financial health of the business itself. 

Financial Disclosure will involve all the information in an Application-Only deal, plus details like tax returns for both the company and the main principals, financial statements, details on revenues, debt, assets, other liabilities, cash flow, shareholder equity, and more. 

The information checked will also increase. The same instances from Application-Only will be used (credit reporting bureaus, D&B, etc.), but will also involve an analysis of the preceding financial reports. 

In addition, depending on what is being financed and what information is already gleaned from the statements, other factors could be checked if deemed necessary. These could include an analysis of the industry, the current and future market, outside factors that could affect profitability, industry competitor performance comparisons, and more. These don’t happen every time – it depends on the unique details of the company and the applied-for financing.  

Financial Disclosure sounds like a lot of steps, but it can still all happen quite quickly – Financial Disclosure equipment financing can usually be completed in a matter of days. But for companies that are borrowing, they do understand that these larger deals will take more time. 

So now you know what Financial Disclosure Equipment Financing means – a call to your accountant (or a trip to the basement) for statements and tax returns. But it’s all for a good cause – getting you the funds you need for that major equipment purchase! 

The details of each will vary depending on your lender, and what one lender calls Application-Only may differ from what another lender considers it, but in the big picture, most equipment finance applications will come down to one of the two.

The primary difference between them is how much information you are asked to give, and how deep the lender needs to investigate your credit and finances.

At Crest Capital, we have a distinct line between the two: for most equipment financing and leasing deals under $250k, we use Application-Only. For larger deals, we use Financial Disclosure. 

Let’s talk about Application-Only today:

Application-Only Equipment Financing

Application-Only equipment financing is exactly what it sounds like – one simple application is all you need to fill out. And it’s literally only one page. 

This offers a distinct advantage to our customers. They do not need to fill out a bunch of forms, or drag out the tax returns and financial statements to finance a few machines, vehicles, or similar. Many other lenders will want much more for even small financing amounts, so this is a differentiator for Crest Capital.

So what information do we require? You can see the Application-Only equipment financing form on our website, and even download a copy if you prefer to email or fax it. 

But the gist of it is we need some company information; basic details and info on company principals; bank info; a lending reference; and (of course) the details on the equipment you wish to finance or lease, including the price and how long you wish the term to be.  

From this information, we can check public credit records for company principals and the business. The normal consumer credit reporting agencies are checked, as well as business credit specialists such as Dun and Bradstreet, LexisNexis, and several others. 

The entire point of application-only financing is to use public records, and not detailed financial reports. Of course there are some companies with long credit histories that can easily stand on their own, but also many companies without years of credit in the business name. Hence the mix of personal and business credit sources used.  

A large upside to using public records is speed. Most of our Application-Only deals have an answer in a business day or even less.  

Note that the $250k mentioned earlier is our number for application-only financing. Another lender’s number for the same process may be lower (and may even be zero – for example, most banks typically want more paperwork.) Every lender is unique in this regard. 

So the key takeaway for you is when you hear the words “Application-Only” for equipment financing, think “easy / fast”, as that is generally the case. 

Time was when equipment financing was ALL paper-based. You filled out a paper application, you usually got an answer via another piece of paper, if you were approved everything was put on paper for you to sign, and a paper check was cut.

And that’s if you used us. If you went to the bank instead, you can add the years of financial statements they’d want to see (all paper). 

And this is still true today – we hear from customers all the time that the bank wanted a hard copy of an old tax return that was long since filed under “we’ll never use this again.”  

Contrary to that, we’ve made everything virtually paperless. And simple. Here’s how:

• You can find out if you’re likely to qualify for equipment financing right from our home page. It’s fast and free. 

• You can get an equipment financing payment quote online.

• You can apply for financing online. Oh, and for any financing under 250k, you don’t need any paperwork or financial statements. We can give you an answer electronically too. 

• You can electronically sign your finance agreement.

• We can EFT the funds to your equipment vendor.

See a theme? NO PAPER.

Of course, we can do paper if you want. There are many customers that would prefer a hard copy to read and fill out, and we completely understand that and accommodate them.

That said, the best part about paperless (besides the obvious) is the speed involved. We’ve always been fast, even when we used paper for everything, but the speed has markedly increased with fewer “paper steps”. The above bullet-pointed list can be accomplished in about a business day, and that’s only because banks typically take that long to wire funds. 

We’re proud of reducing the paperwork needed to finance equipment, and will always continue to innovate. Maybe in 20 years, a few clicks, and a drone shows up with your new equipment. We can dream!