Equipment Leasing and Financing for Startups

The Basics of Equipment Leasing and Financing

Starting a new business is an exciting venture, but securing the necessary equipment can be a challenge. Equipment leasing and financing offer viable solutions for startups to acquire essential tools without the substantial upfront costs of outright purchases. By spreading the cost over time, you can preserve cash flow and invest in other areas of your business.

 Credit Parameters and Financial Requirements

Understanding the credit parameters and financial requirements is crucial for startups seeking equipment financing. Here’s what you need to know:

• Down Payment: For startups, there is no such thing as a $0 down payment. You must have “skin in the game.” This typically means providing a down payment, which can be higher for those with lower credit scores.
• Security Deposit: Lenders often require a security deposit to mitigate their risk, especially for startups with sub-prime credit.
• First and Last Month’s Payment: Be prepared to pay the first and last month’s lease payments upfront.
• Administrative Fees: An admin fee may also be required to cover the costs of processing your lease application.

 Credit Considerations

The creditworthiness of your startup plays a significant role in the terms of your equipment financing. Here are key points to consider:

• Sub-Prime Credit: If your credit is sub-prime, expect to make a larger down payment, provide additional collateral, or offer a higher security deposit.
• Credit Limits: Lenders limit the amount they are willing to lend to startups. Depending on your credit score, financing amounts can range from $5,000 to $50,000, with some lenders going up to $75,000 for those with decent credit.

 Industry and Equipment Type

The type of industry and equipment also impacts the approval process and terms:

• Riskier Industries: Startups in industries like long-haul trucking are seen as higher risk compared to more stable fields such as plumbing.
• Specialized Equipment: The type of equipment matters. A plumber seeking a service truck might find it easier to secure financing than a restaurant looking to outfit a new kitchen.
• Collateral: In some cases, the equipment itself can serve as collateral, but additional collateral might be required based on the risk assessment.

 Why Liberty Capital Group, Inc.?

At Liberty Capital Group, Inc., we understand the unique challenges startups face when seeking equipment financing. Our expertise lies in structuring transactions to maximize approval chances. Here’s how we can help:

• Tailored Solutions: We provide personalized financing solutions based on your specific needs and industry.
• Expert Guidance: Our team has extensive experience in navigating the complexities of startup financing.
• Flexible Terms: We work with you to find the most favorable terms possible, considering your credit and business situation.

Have to learn that start up is a right, but lenders are not obligated. You have to realistic. You have to learn that most funders will not expose themselves to one client. They won’t put all their eggs in one basket. Working with Equipment Loan Broker like Liberty Capital will be able to provide you multiple funding under one roof, one application without having to bank hop to multiple lenders just to get turned down.

You work with an insurance agency who shops for you for the best rate, why not Equipment Loan Broker? Why not small business loan broker? Most business owners shy away from working with broker, but forget the lenders also have salespeople who are commission based. Most lenders offer the same rate they would offer to Broker. Some brokers get lower rate due to volume incentives, so there are many advantages to working with small business loan broker.

Securing equipment financing as a startup requires careful planning and an understanding of what lenders are looking for. By preparing for down payments, security deposits, and understanding the impact of your credit score, you can improve your chances of obtaining the necessary funding.

As a start up if you ‘ve have had any of these you’re likely going to have difficulty getting funding without big down payment or big collateral.

Prior recent, open or previous bankruptcy. No open judgements. Open tax liens. No delinquent, collections or behind on child support. No bank account. No Credit score. No money to put down. Must have skin in the game if you have bad credit. You can’t expect a lender to trust your word showing history otherwise.

At Liberty Capital Group, Inc., we are committed to helping startups succeed by providing the financial support needed to get off the ground. Most of the time you will not like what you hear but it’s because we are honest. Honesty sometimes hurts but sometimes motivator. Contact us today to learn more about our equipment leasing and financing options and how we can help your new business thrive. We never charge application fee.