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4 Reasons why business owners should consider using a finance company rather than their local bank for their next equipment financing?
31 January 2022

4 Reasons why business owners should consider using a finance company rather than their local bank for their next equipment financing?

Small businesses have a variety of financing and leasing options in the market place today. Depending on your specific business (and sometimes personal) credit history, it may easier these days to qualify for a business loan or it very well could be more difficult to obtain that loan approval. With stringent requirements and endless paperwork, more business owners are turning to equipment and software financing companies for a much simpler, faster process. Below, we’ve outlined some of the important benefits business owners will see by using an equipment and software financing company for their next purchase.

  1. Fast & Flexible: Finance companies tend to move much quicker than local community, regional or national commercial banks.  Finance companies tend to work off of one page applications versus the stacks of financial statement reporting required by banks. This tends to speed up the process so you can get your equipment or software faster. Additionally finance companies tend to finance 100% of the purchase, offer more variety of payment plans while banks typically require money down and limit the terms to 3 year payback.
  2. Financial Statement Reporting:    Since financing companies can usually issue a credit decision by reviewing just an application from their customers (on transactions $250,000 and under), very limited to no financial statement reporting (both business and personal) is required. Finance companies typically do not require on going annual financial reporting like banks request. Additionally, finance companies let you manage your business and do not require you to adhere to loan covenants that which is effectively the bank telling you how to manage your business and your cash flow. Finance companies are just less time consuming.                                                       
  3. Collateral:     Banks typically will require a blanket lien on all of your company’s assets as well as a personal guarantee. Although finance companies will also require a personal guarantee in certain circumstances, they will only take as collateral the equipment or software they are financing. This is much less intrusive. A bank’s blanket lien on your assets gives them more control over your business
  4. Protect Borrowing Availability: When you use a finance company to finance equipment and software, you preserve and maintain the ability to go to your bank for a working capital loan in the event you need cash flow help. Borrowing money from multiple sources keeps you from hitting your approval limit at your bank.  Be smart and protect your access to cash         
Small businesses are looking for fast, flexible and less intrusive sources of financing.
Financing companies provide that option.  We recommend you seek out a finance company for your next equipment and software purchases.  GSG Capital is here to help @ info@gsgcapitalllc.com or www.gsgcapitalllc.com


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