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Tag : equipment financing

By Bob Callander

Credit Scores are on the Rise

Credit Scores are on the Rise

Summarized from The Wall Street Journal

 

Consumer credit scores continued to climb in the U.S. this past spring due primarily to lower unemployment and steady economic growth.  This trend is further enhanced by the credit agencies and the way they report historical consumer financial problems.  Foreclosures and bankruptcies originating during the “great recession of 2008 – 2010 are just now starting to fall off individual credit reports.  More than six million U.S. adults will soon have their recession-related financial problems completely wiped out.  Higher credit scores will follow.

Average credit scores nationwide surpassed 700 in April 2017, the highest average scores since 2005.  This helps the economy since higher scores enable lenders to not only make more loans but make them at lower / less risky interest rates.  Most affected will be the purchases of “big-ticket” items as consumers buy more cars, boats, appliances, furniture, and homes.

Credit card borrowing, already on the rise, should also continue to trend further up thanks to higher card limits and more competitive / lower interest rates.

Altogether, higher credit scores are good for borrowers, lenders, and the economy in general.  Look for a flood of new loan solicitations and credit card promotions.  The economic cycle leading to easier credit for more credit worthy consumers is well underway.

By Bob Callander

What to Know Before Your Manufacturing Company Applies for Credit

What to Know Before Your Manufacturing Company Applies for Credit

As a manufacturing or processing company, you must constantly stay current with technological improvements in advanced machine tools, computerized conveyors, material handling equipment, storage facilities, etc.  This equipment does not come cheaply.  While lease and loan financing are available, applying for credit can be tedious, time-consuming, and frustrating, even for those companies with extensive and positive credit history. Fortunately, there are ways to make this process less painful, while also enhancing the probability of credit approval.  Wouldn’t it be nice to hear, “Yes, your credit is approved,” more often?

It all starts by understanding credit from a financial institution’s point of view.  Credit professionals typically cope with two opposing forces…wanting to extend credit as often as possible and wanting to keep their institutional money safe. Here are a few ways you can help:

  1. Ask for a reasonable amount of credit in relationship to your company’s capacity to pay it back. Cash flow is the key. You must show how and where your company will get the money to make repayment.  Will the loan be used to lower your costs, produce greater revenue, or both?  Be specific and detailed.  This is exactly what your financial institution is looking for.
  1. Tell your company’s story in a way that makes sense and helps your financial institution understand your complete history. When and how did you start your business?  How much did you personally invest?  Where did other money come from?  What are key elements of your success?  How will adding new equipment now help you expand?  Will the cost of expansion pay for itself?
  1. Prepare and provide historical financial statements that answer the questions your financial institution will ask. The numbers must support your request.  Confusing and inconsistent financial statements always throw up a red flag, thus slowing the process and lowering the probability of credit approval.
  1. Don’t try to hide the bad news. Every business goes through difficulties.  Your financial statements will show this.  Talk about these problems as openly and willingly as you would your successes.  If you make your financial institution dig for the explanations you will slow the process.  They always discover the whole truth eventually, so why not just save everyone a lot of time.  Besides, your honesty will build trust and credibility.

Prepare and provide financial projections to help your creditor see into your future the way you do.  They don’t know your business or share your vision.  If your projections are both realistic and positive, they’ll hop on board and want to help you succeed.  That’s when you will hear them say … “Yes, your request is approved.”

business leasing louisville

By The Leasing Group

Leasing…Give Me the Facts not the Myths

Businesses often tell us how surprised they are to discover how quick, easy and flexible lease financing can be.  They also comment on rates, asset encumbrances, purchase options and other variables related to equipment financing.

 

Here’s what they say about leasing after they discover the facts:

 

Lease End Purchase Options – “With a lease we can choose either a $1 purchase option or a stated purchase amount approximating fair value.  It’s nice to know the exact cost of either option before we make a decision.”

 

Encumbrances – “Bank loans come with strings attached, specifically covenants and UCC filings against everything we own.  Leases are typically secured only by the leased equipment, no other company assets.”

 

Soft Costs – “It’s good to know our lease can include IT software, equipment delivery, installation, sales taxes and other soft costs.    We wish we had known this sooner.”

 

Rates – “Manufacturers and suppliers provide quick and easy equipment financing, but often at high rates coupled with a variety of fees.  Local leasing companies are much more competitive.”

 

Simplicity – “We want quick response to our questions from knowledgeable people who care.  We’re much too busy to fool around with inefficient and unresponsive long-distant voice mail systems.  That just creates another hassle.”

 

These businesses are correct.  That’s why they stick with The leasing Group.

 

“The Leasing Group partners only with local community banks, so rates are always reasonable.  They cap purchase options, include all associated costs, respond quickly to questions and concerns and never tie up other company assets.  We’re sticking with them.”

 

 

Leasing Questions? (502) 456-2800

Business Leasing Application Online

More Experience, More Sources, More Approvals

business leasing success approved

By The Leasing Group

“We’ve Got Cash to Lend”

We haven’t heard a banker say that in a while, at least not in the last five difficult years.  But that quote comes directly from a recent article in our local business newspaper.  The quoted banker was trying to make a point.  Once crushed by bad real estate loans, his bank has emerged stronger than ever with money available for lending, including loans to small and mid-sized businesses.

 

Public perception would tell you that banks are still reeling from the financial crisis; that bank examiners continue to place barriers between banks and their customers; that banks remain hunkered down for fear of making many of the same lending “mistakes” and getting penalized for risky underwriting.

 

In reality, we find this perception only partially true.  Yes, examiners are difficult, sometimes even unreasonable, and yes, there is still a fear of repeating questionable lending practices of the past.  But there is also a realization by bankers that loan growth must again lead them to profitability, only this time growth will extend beyond real estate lending to business equipment loans and leasing.  This is great news!  The path to loan diversification leads directly through small and mid-sized entrepreneurial companies.

 

As the economy continues to recover and business owners regain confidence, they will pull delayed growth plans from their shelves.  When they do, banks stand ready and willing to again loan idle funds.

 

In the future, we can expect more banks to scream “Come see us.  We’ve got cash to lend.”

 

Leasing Questions? (502) 456-2800

Business Leasing Application Online

More Experience, More Sources, More Approvals

best business funding leasing

By The Leasing Group

#1 Best Idea for Business Expansion

#1 Best Idea:   Allow businesses an option to write-off 100% of the cost of new equipment purchases in the year of purchase.  Good idea, right?

 

Oops, we had that already.  It was known as IRS depreciation “Section 179” and allowed a 2013 deduction up to $500,000 plus a 50% bonus depreciation on purchases over $500,000.

 

What an incredible windfall! 

 

Unfortunately this super generous tax code provision all but expired completely on December 31st last year.  Party over!  It died without as much as a whimper.  The new limit is now only $25,000, a paltry sum by any standard and hardly worth mentioning.  Bonus depreciation is gone too.

 

So what’s a business to do?  Gifts from the IRS don’t come around that often.  Sometimes we appreciate them most after they’re gone.

 

Leasing to the rescue! 

 

Businesses can still deduct 100% of their leased equipment over the lease term, provided they request a “true lease.”  Yes, it’s true, even when leases are capitalized for book accounting purposes (and most are), they can still be 100% tax deductable

 

Who stands to benefit most?  Profitable proprietorships, partnerships, sub S companies and LLC’s, where taxable profits flow through to individual owners in high tax brackets. 

 

Don’t delay…this popular tax break might expire soon too! 

 

Leasing Questions? (502) 456-2800

Business Leasing Application Online

More Experience, More Sources, More Approvals

By The Leasing Group

Cultivating Mutual Trust

The typical lease agreement is six pages long, laced with legal terms and conditions spelling out the obligations of each party! This document is the product of a team of lawyers determined to disclose every suffocating detail.  Like so many legal contracts, a lease is best read late at night by those in search of sleep.   

 

Our lease is no exception.  It is well-crafted, specific and thorough, as it should be.  But, in spite of its importance, I can’t remember more than a handful of clients having ever read it. 

 

Do our clients lack the qualifications to read and ask clarifying questions?  Do they lack the time and energy to study our lease before they sign?  Are they intimidated by the legal detail?  With so much at stake, wouldn’t it make sense to have an attorney review every paragraph?  Instead, our clients typically flip through the pages in a matter of seconds, and then ask…“Is there anything in here I need to worry about?” 

 

Here is why:

 

  • Our clients know we will honor the terms we agreed to verbally.

 

  • Our clients know we will not add hidden fees and charges that change the economics of the transaction.

 

  • Our clients know we will not place liens or encumbrances on unrelated business assets.

 

  • Our clients know our early buyout provisions are fair and without penalty.

 

Trust takes time and effort to build over years of doing what we say we will do.  In the short term building trust can be costly.  But, long term nothing matters more.   Trust strengthens every relationship, while reducing the time and energy spent on doubt, fear and suspicion.  Cultivating mutual trust is the only way to do business. 

By The Leasing Group

A TLG Story: The Mayor’s Fire Truck

Imagine yourself a resident of a small Kentucky town (population 2,500)–a spot that barely makes the map, but that is rich in local history and has at its helm a mayor who was born and raised in the town he now serves.

He loves the town and its people and wants to do right by them. Of particular concern to him last fall was securing funds to purchase a new fire truck for the volunteer department that serves a his town. Given the combination of the broad expanse of the district the volunteer fire department serves, and scarce resources, if a home or business were to catch fire, fighting it would be a challenge. At best, property lost; at worst, lives lost.

So the mayor set about seeing what he could do, figuring out costs and logistics, considering a bond issue, and finally securing a quote to lease a fire truck. However, he wasn’t quite satisfied with the quote, mostly because he wanted to work with his local bank, and he also needed to move quickly.

The local bank wasn’t entirely sure how to make it all work, so they reached out to a company they trusted to help them navigate the process–enter The Leasing Group.

When all was said at done, the mayor saved his beloved town $20,000 over a ten-year term, and the local bank funded The Leasing Group’s lease. In sports language, that’s called a win-win-win.

And at a very human level, it means the mayor and the people he serves can perhaps sleep a little better at night, knowing that if a fire does come, they’re equipped to fight it.

By The Leasing Group

In Their Own Words

The Leasing Group stands out because of our focus on fostering positive and longterm business relationships.

We care about our clients and make it a practice to listen to their needs. It isn’t easy to start a business, much less maintain it. Our job is help companies large and small navigate through the financing process in such a way that everyone benefits.

Because we value our clients so much, we’re particularly grateful to these folks for putting into their own words why they chose The Leasing Group:

Our company has turned to The Leasing Group for years. They take the hassle out of shopping around for credit and also improve our chances of approval.
(Steve, CEO of a distributor)

The Leasing Group always handles our credit requests in a timely and professional manner. We’re not just another number in the system.
(Tony, restaurant owner)

The Leasing Group is well connected and highly regarded within the banking community. We rely on their financing expertise and always receive competitive rates.
(Albert, CFO, manufacturing company)

We have developed a great banking relationship and we value our banker’s trust and confidence, but due to our rapid expansion we are pushing the limits of our bank’s financing capacity. The Leasing Group is a great source of alternative credit.
(David, aging care company president)

By The Leasing Group

Pulling Together

Cycling is my favorite pastime.

It is not because of the colorful racing clothes, expensive bicycles or the chance to break record speeds. Those things are reserved for much younger and stronger legs. You’ll most often find me traveling through interesting neighborhoods, quiet parks and gently rolling hills surrounded by horse farms.

Sometimes, though, I find myself riding single file with a group of friends and I pretend I am in southern France competing for the Tour’s yellow jersey and a spot on the podium. Rounding curves I imagine the Italians in front and Spanish behind. My pace quickens when the French attempt a pass or those pesky boys from Brazil decide to attack. Sometimes I’m in the front breaking the wind for my team. More often I’m enjoying a back seat while the others do the heavy lifting. Nothing can describe how amazing it feels to be pulled along by others while exerting such little effort.

The Leasing Group is made up of small community banks trying to survive in a financial environment dominated by the big and powerful. We complete daily against superior resources as a modern day David against the Goliaths of banking. Community banks are known for their superior service and personal attention to detail. They also work together, as members of The Leasing Group alliance, offering a menu of equipment financing options and the greater financial capacity that comes with sharing the load.

It’s not unlike pulling up a steep hill. We do together what is more difficult to do alone. When that happens, the client always wins, and we all wear the yellow jersey.

By The Leasing Group

The benefits of going local for your lease financing needs

As a small or medium-size business, you’re likely focused on community engagement and contributing to your local economy. So why would you go to a national financial institution when it comes time to finance your next equipment lease?

Like you, community banks are focused on developing partnerships at the local level. They want to boost commerce in their immediate region and help businesses like yours thrive. Their core mission is to channel financing to the neighborhoods where their customers live and work.

Local banks are more likely to take into account certain intangible factors when approving credit, such as a company’s reputation and the owner’s character. They take the time to consider issues that contribute to lower credit scores and they are more flexible in their credit requirements.

In many cases, businesses can get the same services at a lower cost through a local bank. Community banks offer most of the same services as their national counterparts, while maintaining fees and interest rates at lower levels.

Building a relationship with a local bank through equipment lease financing means you will have face-to-face relationships with a human being. You’ll have daily access to both loan officers and senior management.

Community bankers live alongside you in your community and have a distinct understanding of local needs. Decision-making is often faster, and your local banker will likely stick with you as your business grows and your equipment leasing needs ramp up

The Leasing Group has solid relationships with nearly all of the local banks. Contact us at (502) 547-2773, and let us secure local financing for your business equipment leasing needs.

Credit Scores are on the Rise
What to Know Before Your Manufacturing Company Applies for Credit
business leasing louisville
Leasing…Give Me the Facts not the Myths
business leasing success approved
“We’ve Got Cash to Lend”
best business funding leasing
#1 Best Idea for Business Expansion