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. 

So now, I will ask once again in this blog: if you sell any kind of business equipment, are you offering a monthly payment option? Because right now, it matters more than ever. 

The ongoing COVID-19 pandemic has affected countless companies. But many of them are still operating, and still need the equipment you sell. And right now, they want monthly payments. And I feel that will continue long after this is over as well. Here’s why:

Toilet Paper and Money in the Bank – Same Thing

Let me ask you a quick question – when this is all over, will you EVER be without a few extra rolls of toilet paper in your home? I doubt it. 

For companies, when this is all over, you can bet they are going to be a little more reluctant to part with cash. We’ve all seen how fragile “things” truly are. Companies that didn’t embrace monthly payments in the past are changing their tune – they’d rather keep their cash and use borrowed money for equipment. 

So right now is an ideal time for equipment sellers to make sure they are offering financing. 

Now here are the no-brainer aspects:

• Offering financing costs you nothing. NOTHING.
• You take no risk – you still get paid in full right away. WE take the risk.
• There’s no work involved. Adding financing to your website takes mere minutes.

Nothing changes for you except your customers can now get easy, fast financing (at great rates and terms) at the click of a button. The bottom line is, you’ll sell more. I’ve seen it happen thousands of times. It gives you an advantage right now, and gives you a big one once this is all over and things start moving again.

If your sales have fallen, and you’re still scoffing at offering financing, I don’t know what to tell you. It’s like refusing a life preserver when you’re drowning. Or toilet paper in a quarantine! 

No cost. No risk. No work. No excuses. 

Visit https://vendorprograms.crestcapital.com and we’ll get you started.

Last time, I reiterated that there’s no risk at all to equipment sellers, and also stated that yes, your customers definitely want financing. Let’s continue with the (inaccurate) beliefs companies have about offering financing, and shine a bit of light on the truth.

“It’s Too Much Work”

Not even a little bit true. Here’s how much work it is: “Hey Customer… you want monthly payments? Here, use these folks.”

Seriously, that’s how much work it amounts to. For my company, we even have online tools that our vendor partners can install in two minutes (it’s cut and paste), we have artwork, etc. Ok, It may take an afternoon to put “financing available” on your collateral. But that’s it.

Best of all, once that happens, it’s literally “set and forget”. You don’t get involved in the actual financing transaction. You simply sell your goods and get paid. Like always. 

“It’s Not Worth the Trouble Because It Won’t Help Sales”

This is the biggest misconception. Remember last post when I said 80% of all equipment purchases are financed? Think about that. Think about when your customer comes to your website or reads your brochure, looks over your goods, and sees things like “monthly payments available” or (even better) “as little as $XYZ a month”. 

I shouldn’t have to tell you that that’s an incredibly powerful deal closer. If you don’t believe me, ask your best salesperson. He or she likely gets the “do you offer financing?” question a lot. Offering payments not only makes it super easy to buy from you, it completely takes the “affordability” rebuttal off the table.   

Listen, your customers are going to finance equipment anyway. Many of them don’t want to go to the bank, because the bank has tons of restrictions. Save them the trip and offer them better financing right at the point of sale. There’s no risk to you or extra work on your end, and trust me, sales will go up – I’ve seen it happen time and time again. 

2020 is off to a great start. Let’s make it even better by getting YOU on the equipment financing bandwagon.

But I’m not – in fact, as an overall number, the amount of businesses accepted is not very useful (there are just too many factors involved.) What I AM going to talk about is the fact that equipment financing approval (or denial) is generally based on numbers, and not emotion. It’s really the only way we – as an equipment financing company – can do things.

This all came about in my head from a recent post on vendor-lender equipment financing relationships. Specifically, the post on vendor recourse programs. The general gist of the post was it’s a relationship where a manufacturer assumes some risk because they feel it’ll be profitable to them. Perhaps it’s because they feel they will move enough product to offset any defaults, or maybe they know their industry well enough that they think their product will help customers bounce back, etc. Either way, in this relationship, they accept some risk that we will not.

Think about that last statement for a second… my equipment financing company, simply from looking at the numbers (years in business, income, liability, credit history, etc) will say “no”. But the vendor wants to step in and say “yes”.

Sometimes, they say “yes” due to margin – they make enough profit on the sale that the “default rate” won’t matter. That’s ok – it’s still going by the numbers.

However, other times, it’s not. Instead, they feel their customers (or their industry) will buck the normal trends and default at less than the predicted rate. They are going by MORE than the numbers – they are going by emotion. Which, as a lender, I can tell you is a pretty bad way to go about things. It’s like loaning money to your brother-in-law to get his impounded car back… how do you think MOST of those transactions worked out?

Now, I’m not saying this is necessarily bad, mind you. But if you lend money to people whose numbers say “don’t lend”, they will almost always default at a fairly predictable rate (yes, shockingly, even brother-in-laws with impounded cars!) I mention this because I can’t tell you how many times I’ve seen a vendor recourse program result in the vendor being “surprised” at who doesn’t pay. But the numbers don’t lie.

This doesn’t mean we never put emotion into a decision – sometimes, you just have to go with your gut. But some thought is definitely required in figuring out which brother (in law) we can spare a dime to!