The Leasing GroupThe Leasing Group

by The Leasing Group

You know that your company is stable and successful. You’re confident that you look good on paper. But when it comes to getting credit approval for equipment lease financing, you could still hit a snag.

Why? Because nuances of the approval process vary slightly from bank to bank. Banks use structured approval processes that are similar, but not identical. Some put the highest priority on cash flow, while others look at credit scores more closely. The subtlest differences in requirements can mean approval or denial.

Factors banks consider that can make or break credit approval include:

  • Strength of collateral. Will your equipment generate product and make money for your company? Is the equipment re-sale value substantial enough to repay the lease in the event of a default. Those are the types of questions certain banks consider heavily.
  • Size of financing request. In some cases, a large financing request might be denied because it poses exceeds a bank’s limits. In other cases, a lower amount might cause your application to end up in the reject pile because it’s too small, and not worth the bank’s trouble.
  • Industry concentration. You might pay the price if a bank is already overextended in your industry. In addition, some banks shy away from entire industries because of inherent risks involved or past negative experience.
  • Geography. Some community banks won’t lend outside their state or region. Even if your company is locally based, your credit might be denied if the equipment you’re leasing will be located at a facility outside the bank’s service region.
  • Credit scores. Banks vary somewhat in their minimum credit score thresholds. A few points on the low side might be to your detriment, depending on the bank you approach. In addition, some banks put more emphasis on the personal credit scores of company owners than others.

Expectations vary from bank to bank. Navigating the waters of credit approval on your own can be difficult. The Leasing Group’s financial experts have a combined total of 100+ years of experience, as well as established relationships with many local banks.

Give us a call at (502) 547-2773 to find out how we can help guide your business through the credit approval process.

The Leasing Group
About The Leasing Group