Every so often on this blog, we’ll address some frequently asked questions about our most popular financing options so you can get a better understanding of the many options available to you and the benefits of each. This month’s Featured Finance FAQ focuses on the fair market value (FMV) lease, which sometimes qualifies as an operating lease.
With an FMV lease, your business can use the leased equipment for a set time period and on a consistent payment schedule. The terms of the lease are agreed upon in advance within the financing contract.
Most FMV leases have terms ranging from one to five years. At the end of the lease term, you will have three options for what to do with the leased equipment:
The choice is up to you and will depend on your business needs. If you’re not sure about what you want to do with a piece of equipment in the long term, an FMV lease gives you the freedom to hold off on a decision until your lease ends. However, that’s far from the only benefit of an FMV lease.
Some of the many other benefits include:
FMV leases tend to be very affordable but can also be highly dependent on the equipment the company is looking to purchase. Used or specialized equipment is more difficult to finance through an FMV option. FMV leases may also require slightly stricter qualification requirements compared to other financing options. However, if you’re interested in an FMV lease for your business, be sure to speak with our financial specialists at Team Financial Group — never just assume you won’t qualify!
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Another way to evaluate whether an FMV lease is the right option for your business is to consider the type of equipment you’re looking to purchase. Some types of commercial assets that businesses tend to acquire using FMV leases include:
A recent example of a Team Financial Group client who received a fair market value lease is LaFleur. As a growing digital marketing company located in Grand Rapids, Michigan, LaFleur needed to move into a bigger and better office to keep up with the growth of their team and client base. Not wanting to sink too much available capital into furnishing the new office, LaFleur president and CEO Chip LaFleur got in touch with Team Financial Group for help.
We provided LaFleur with both a fair market value lease and a $1 buyout lease, which allowed the marketing firm to minimize the initial expenses of moving into a new space and conserve working capital. The $1 buyout lease helped LaFleur acquire high-end furnishings and office equipment while the FMV lease allowed the company to buy new laptops and accessories. These purchases helped LaFleur build an inviting and functional new office they plan to use for years to come.
Have questions about what type of commercial equipment lease is right for you? Let’s chat! If you’re ready to apply for a fair market value lease, fill out our easy online application and let us do the rest. Or, if you have questions about our offerings or your options, give us a call today at 616-735-2393 or fill out our online contact form.
The content provided here is for informational purposes only. For personalized financial advice, please contact our commercial financing experts.
Wondering what types of equipment you can purchase with help from a financing partner? As an independently owned commercial equipment financing company, Team Financial Group has the flexibility to finance businesses across many different industries and at all stages of growth and development. Whatever equipment and assets your company needs, we can help.
In this article, we’ll go into more details about some of the most popular equipment types we finance.
Whether you’re a new business purchasing your first set of equipment or an established company looking to acquire more assets to keep up with demand, purchasing heavy equipment can be pricey. For example, if you need to buy your first refrigerated truck to transport products, you can expect that truck to be much more expensive than buying a typical passenger vehicle.
At Team Financial Group, we have years of experience helping clients finance commercial equipment such as:
Since most of our clients want to keep their heavy equipment for many years to come, we typically recommend a $1 buyout financing option for this type of equipment purchase. With this type of lease, you own the equipment outright and pay fixed monthly payments, which can also protect you from interest rate fluctuations.
Interested in learning more about how our $1 buyout option could help you acquire the heavy equipment you need? Check out the following client success story.
CLIENT SUCCESS STORY: RGD Builders Receives a Financing Option Built for Their Business
Keeping up with the latest technology is crucial for any company. One of the problems companies face is that technology quickly becomes obsolete, and the frequent upgrades needed to stay current can become a financial burden.
Partnering with Team Financial Group can help relieve the strain of purchasing costly replacements for outdated technology. Our equipment leasing options can help you manage the costs of continuously updating equipment while carrying a lower payment. You can also choose at the end of your term whether you want to purchase the product or upgrade to the latest tech.
Some examples of technology we’ve helped clients acquire:
Manufacturing companies require a variety of assets and equipment to produce goods on time and store them safely. And even companies outside the manufacturing industry sometimes need to make major equipment purchases like refrigerated storage rooms or customizable packing solutions.
Manufacturing and storage assets can vary greatly from company to company, but in the past, we’ve financed:
One of our agricultural clients, New Era’s American Apple, needed a variety of manufacturing, packaging, and storage equipment to help keep their fruits and vegetables fresh and minimize the time from harvest to market. The company’s unique cash flows also meant they needed a customized financing option that worked with the seasonal nature of their business. You can learn more about how we were able to help American Apple by reading the following client success story.
CLIENT SUCCESS STORY: American Apple Receives Financing to Help Grow Their Business — And Their Crops
Although we work with many clients in the construction, manufacturing, and agricultural industries, we have also served businesses in a wide range of other industries. Some of these companies have included automotive dealerships, investment firms, and beverage production companies who have partnered with Team Financial Group to acquire equipment such as:
For more information about the equipment we’ve financed, check out the ”industries served” section on our homepage.
Team Financial Group can help your company finance most types of commercial equipment and assets, from tractors to office furniture to alternative energy sources like solar panels. If you have questions about our offerings or application process, let’s talk! Call us at 616-735-2393 or fill out our contact form.
Ready to get started growing your business? Start our simple online application and let us do the rest.
The content provided here is for informational purposes only. For financial advice, please contact our commercial financing experts.
Proper Beverage is a beverage production company that manufactures several proprietary lines of canned drinks in addition to taking clients’ ideas from concept to market. Proper Beverage partners with other companies to provide full-service beverage production capabilities, including product development, canning, packaging, and even marketing services.
When Proper Beverage first started looking for a financing partner, they repeatedly came across companies who loved their story and business plan but wouldn’t provide capital due to the beverage company’s lack of established business credit. They faced the same fundamental issue so many people face when trying to build credit: it’s tough to find a lender who will lend to a company with little to no business credit history, but it’s also hard to develop a credit history without receiving some type of credit first.
The lack of available financing created serious obstacles for Proper Beverage. The company couldn’t build the production facility they required to can their beverages and generate revenue, let alone act on their plans to expand the company to offer beverage production services to clients.
Fortunately, Proper Beverage President Kevin Clement heard about Team Financial Group and decided to get in touch. Team Financial Group was willing to look at Proper Beverage holistically rather than focusing only on credit history. After learning about Proper Beverage’s story, leadership, business plan, and vision, Team Financial Group knew a partnership made sense.
“While numbers are important, we wouldn’t have made the cut early on if Team Financial Group had made their lending decision based on numbers alone,” Kevin says. “They looked at our whole story — our business plan, our backgrounds, and our vision.”
RELATED ARTICLE: How to Choose the Right Commercial Lender
Team Financial Group recommended their popular $1 buyout financing option to help Proper Beverage get on their feet. This option allowed Proper Beverage to purchase the equipment they needed to start production, including:
“We would not be here without Team Financial Group, period,” says Kevin Clement. “Had we not found them, we would not have been able to finance production and would not have the half of our business that is co-packing.”
At Team Financial Group, we know that credit history isn’t everything, and we consider a wide variety of factors when evaluating a financing application. We partner with a wide range of growing businesses with a variety of capital needs and credit histories to find flexible financing solutions. If you’re ready to get started, fill out our easy online application and let us do the rest.
Have questions about what financing options are right for your business? Call us today at 616-735-2393 or fill out our online contact form to get in touch.
The content provided here is for informational purposes only. For personalized financial advice, please contact our commercial financing experts.
For many first-time business owners, the prospect of working with a financing partner to obtain commercial financing feels intimidating. There’s a confusing array of lenders, types of financing, and financing terms to choose from, and the financing process itself can feel less than transparent.
In this article, we’re going to walk you through the basic steps of the commercial financing process to clear up confusion and make sure you know what to expect. Note that we’ll use the terms “lender” and “financing partner” interchangeably throughout this article. At Team Financial Group, we generally refer to ourselves as an independent commercial equipment financing partner. However, we know that many people tend to just use the term “lender” for simplicity, even when referring to companies like Team Financial Group that offer a wide range of financing options.
If you’re looking at financing, you probably already have a good idea of what equipment your business needs. So, the first step in the financing process is choosing your lender. For commercial financing, your main choice will be between a bank and an independent financing partner like Team Financial Group.
There are many benefits to choosing an independent financing partner over a bank. The biggest benefit is speed: Team Financial Group can likely take care of your entire transaction within 24 hours, where a bank may take several weeks. Another big benefit is that the bank may require a down payment while Team Financial Group will probably be able to offer 100% financing.
Besides those two major benefits, an independent financing partner like Team Financial Group can provide other perks like increased flexibility and personalization, experience working with a wide range of businesses that don’t fit into the bank’s rigid “box” of preferred clients, and existing relationships with equipment vendors.
For more information about how to choose which type of financing partner is right for your business, read our full blog article on this subject.
RELATED ARTICLE: How to Choose the Right Commercial Lender for Your Business
Once you choose a lender, the next step is to apply. The application process may vary depending on your lender, but we’ll walk you through the fundamental steps.
First, you’ll need to fill out an application. At Team Financial Group, we understand that commercial financing can seem like a confusing process, so we give you the option of filling out only a basic application consisting of your contact information and business name. This way, if you don’t know exactly what you’re looking for or don’t have all the information you need ready for a full application, you can signal your interest in applying and get personalized help from Team Financial Group with the rest of the application process.
Once you’ve filled out the basic application form, you’ll receive an email with the option to download the full application. If you’re ready to apply on your own, you can get a head start on your application while you wait to hear back from our financing specialists.
No matter which commercial financing partner you choose, you’ll need to provide credit information. The information you’ll need to supply will depend on various factors, including how long your company has been in business and your personal credit score.
At Team Financial Group, our general rule of thumb is that for financing amounts between $5,000 and $75,000, your personal credit history can often give us enough information to make an approval decision. For financing amounts of $75,000 and up, we tend to require tax returns and other financial information.
Information that we sometimes require for larger financing transactions can include:
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Next comes the approval process. In this stage, lenders sort through information about your business to evaluate your risk level and your ability to pay back the financing you receive.
A diligent lender will carefully assess your application to understand your business’ financial situation. Most lenders will focus on evaluating your:
Banks and other lenders will also look at how much capital you have personally put into the business and what assets you have available to put up as collateral. At Team Financial Group, we’re able to operate with more flexibility than a bank, which gives us the ability to structure and approve an application based on many different factors.
RELATED ARTICLE: How Do Commercial Financing Partners Evaluate Loan Applications?
Once your lender has gathered all the relevant information about your business, they’ll use this information to decide how much money they can loan your business and under what terms. In general, the better your personal and business financial history, the more flexibility you’ll receive when it comes to payment and term options.
At Team Financial Group, we have experience providing financing for companies in a wide range of industries and at all stages of growth, so we can draw from this experience to create a custom financing offer that works around your company’s cash flow and unique needs.
Once your lender has evaluated your application and set the terms for your financing, you’ll have a chance to go over everything with the lender and decide whether to sign the final financing agreement. The agreement is a simple contract stating the details of your financing plan, including payment amount, the type of financing, and the term length and schedule.
Interested in obtaining financing to help start, expand, or update your business? Let’s talk! Call us at 616-735-2393 or fill out our online form to get in touch and learn more about your financing options.
Ready to apply? Visit our application page and get started now. All you need to do is provide a bit of basic information and we’ll step in to guide you through the rest of the process.
The content provided here is for informational purposes only. For personalized financial advice, please contact our commercial financing experts.
Are you applying for a business loan? Commercial lenders may look at both your business and personal credit scores before they approve your application. If you have poor personal credit and you’re wondering if it will affect your approval or the terms of your commercial loan, the answer is yes, it can. However, negative items on your personal credit history don’t mean you should give up on applying for financing.
To learn more about how personal credit can affect the process of applying for a business loan, keep reading.
Whether you’re applying for a personal or business loan, lenders are going to take a detailed look at your credit history to determine the risk involved in providing you with financing. Your credit history shows lenders how well you manage your debts and whether you make payments on time, and it also reports how much money you have borrowed in the past and whether you have ever declared bankruptcy. These factors can tell a lender a lot about the risk they’ll take on if they offer you a loan.
RELATED ARTICLE: How Do Commercial Financing Partners Evaluate Loan Applications?
Most lenders will at least look at your personal credit history when determining your eligibility for a business loan. However, some lenders will put less weight in your personal score than others. And if you already have an established history of good business credit, lenders may put even less weight on a lower personal credit score.
In general, you can expect your personal credit to matter more for a business loan when any (or all) of the following are true:
Banks have strict requirements for lending and don’t have the luxury of being very flexible. On the other hand, independent financing partners like Team Financial Group can provide financing to business owners in a much wider range of circumstances than a bank can.
If lenders don’t have enough information to determine your creditworthiness from your business score, they will weigh your personal score more heavily. And if you own a sole proprietorship or a small business with only a few employees, it may be hard for a traditional lender to see the distinction between your business’ credit history and your personal credit.
A few older negative items on your personal credit report shouldn’t make it difficult to receive a business loan, especially if your business’ credit history is strong. However, the more negative items there are on your personal credit history, the more a lender is going to take notice and factor it into their risk assessment.
Your credit history—both personal and business—is only one factor lenders use to evaluate your application, not the be-all and end-all of the financing process. However, credit history is an important factor, and it can have a variety of effects on your ability to acquire the financing you need. Your business and personal credit histories can affect:
Independent financing partners have much more flexibility than banks, and they don’t have to treat an applicant’s history as nothing more than a credit score number. For example, if you have poor personal credit due to a single devastating event that does not reflect on your ability to manage your personal funds, an independent financing partner shouldn’t treat this circumstance the same as if you have a long and consistent history of making late payments or defaulting on debts.
RELATED BLOG ARTICLE: 4 Tips to Improve Your Business Credit Score (and Why You Need To)
There are many benefits to working with an independent lender like Team Financial Group rather than a traditional bank. Besides offering faster financing approvals and more personalized service, Team Financial Group can also provide more flexibility in terms of financing terms and payment options, even if you have issues with your personal credit score.
At Team Financial Group, we will work with you to determine your best financing option and suggest ways you can improve your financing terms if you have a credit score that’s less than ideal. Get the financing process started today by calling 616-735-2393 or completing our easy online application.
The content provided here is for informational purposes only. For financial advice, please contact our commercial financing experts.
Pipetek Infrastructure Services is a municipal contractor for underground infrastructure. Pipetek provides services such as mainline inspections, utility locating, and sewer maintenance.
The team at Pipetek is dedicated to delivering outstanding customer service and making sure each customer is 100% satisfied. Quality and reliability are non-negotiable in the infrastructure industry, and cutting-edge equipment makes all the difference when it comes to providing quality work on a demanding schedule.
Like many booming small businesses, Pipetek’s rapid growth created some hurdles. The company needed to manage their cash flow while still investing to increase their capacity and capabilities.
Pipetek spoke to one of their equipment dealers about their purchasing options. The dealer referred Pipetek to Team Financial Group for help acquiring the equipment they needed to get the job done.
Pipetek was looking to purchase long-term assets such as trucks and other equipment that they would use for years to come. Team Financial Group recommended one of our most popular financing options for equipment, the $1 buyout lease. This option allowed Pipetek to minimize their up-front expenses by paying a fixed amount each month. Additionally, with a $1 buyout lease, the company would own the equipment throughout the financing term. Because Pipetek planned to keep using the equipment in the future, the $1 buyout option met their needs perfectly.
With the $1 buyout financing, Pipetek was able to finance some of their very first units of equipment. In the two and a half years since then, they’ve partnered with Team Financial Group for several other financing transactions.
“Team Financial Group has always had a very strong belief in our success,” says Kyle Dehne, managing director at Pipetek, “and that confidence in us has made [working with them] feel like a partnership versus just another financial transaction. We are really happy with the service and support we have received.”
Some of the equipment Team Financial Group has helped Pipetek acquire includes:
At Team Financial Group, we offer a variety of flexible financing options and terms, and we’ll work with you to develop a plan that’s right for your business. Whether you’re a start-up looking to finance your first pieces of equipment or you need to scale up an established business to keep up with demand, Team Financial Group is here to help.
Ready to get started? Fill out our online contact form or give us a call at 616-735-2393.
The content provided here is for informational purposes only. For financial advice, please contact our commercial financing experts.
Are you using old, outdated equipment? Regardless of your industry, the tools and resources you use or provide for your employees’ use are crucial to the safety and productivity of your team. Servers and other tech can develop wiring issues, and heavy equipment can slowly wear down. Even assets like pallets, shelving units, and safety gloves can cause serious safety concerns if not repaired and replaced when needed. And in addition to the general wear and tear, earlier models of many types of equipment lack the safety measures that newer versions have adopted.
However, creating a safer work environment can be a complex process, and it may not be feasible within your company’s current budget. If you’re interested in developing a safer workplace but are worried about the costs, you should consider commercial equipment financing options.
In this article, we’ll discuss why it’s crucial to create a safe work environment, common equipment safety concerns, and how you can finance your next company safety initiative.
Most companies understand that workplace safety is essential, but many don’t realize the full impact that the work environment can have on their company. The main benefit of improving workplace safety is to protect the health and wellbeing of your employees. Creating a safe workplace often involves developing safety policies and procedures and then educating employees on proper protocols.
However, knowledge alone isn’t enough to keep your employees safe. You need to provide your workers with reliable equipment and efficient protective gear.
Employees who work in a safe environment and know that their company takes their safety seriously will be happier and mentally healthier than those who don’t have that assurance. Companies that dedicate themselves to employee safety often experience benefits such as:
Still not convinced improving your workplace safety is worth all the time and effort? Check out this “$afety Pays” tool from OSHA, which uses your company’s profit margin, the average cost of an injury or illness, and an indirect cost multiplier to estimate the amount of sales your company would need to cover those costs. The results might surprise you.
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You’ll need to be thorough and examine all aspects of your company when developing a workplace safety plan. Although the supplies and equipment you need will be specific to your company, there are a few common safety concerns that plague many industries.
Old or faulty wiring is a serious safety concern that can cause shocks, fires, and sometimes explosions. In addition to the wires themselves, many older buildings have outdated electrical designs that are not as safe as modern integrations.
Poorly maintained or aging equipment can put your employees at an unnecessarily high risk of injury. Other than the equipment that employees use directly, insufficient or faulty HVAC and ventilation systems can compromise the air quality in your workplace and hurt the health and well-being of your employees.
A bald tire on heavy equipment, a stripped gear, a cracked bolt — these small deficiencies crop up during regular use of most commercial equipment, and they can cause devastating accidents. Depending on how worn down your equipment is, you may only need to replace individual parts, or you might be better off upgrading to a newer model.
In addition to replacing old equipment, companies can also use equipment financing to purchase new safety gear. At Team Financial Group, we can provide financing for everything you need to help build a safer workplace. From updated heavy machinery with the latest technology to and even the office equipment you’ll need to help spread safety awareness throughout the company, we’ve got you covered.
Ready to get started? Give us a call at 616-735-2393 or fill out our online contact form and we’ll do the rest.
The content provided here is for informational purposes only. For financial advice, please contact our commercial financing experts.
If you’re trying to obtain commercial financing for your company, you may have already discovered how your business’ credit score affects your eligibility and terms. As a measurement of your company’s creditworthiness, a high credit score can help you secure the best financing options for your business. But did you know that there are also other benefits to improving your credit?
In this article, we’ll outline the benefits of having a higher business credit score and provide tips to improve your business credit. However, if your business’ credit score isn’t where you would like it to be, don’t get discouraged. At Team Financial Group, we’ve helped businesses from all types of circumstances and at all stages of growth secure financing, so you should never assume you can’t get the financing you need. To get personalized help, submit an application and talk with one of our commercial financing experts.
Business credit scores work a bit differently than personal credit scores. So, before we dive into improving your score, we’ll go over the basics of business credit reporting.
Just like with personal credit, a higher credit score can open up a variety of options and help your business in several different ways.
Both banks and independent lenders will check your business’ credit history (and usually your personal credit history as well) during the commercial financing approval process. If you have a low credit score, some lenders might deny your application or offer less favorable terms. On the other hand, having a healthy credit score can help your business:
Did you know that your business’ credit report is public information? Unlike your personal credit, your company’s credit history can be viewed by any potential client, vendor, or partner. A low credit score can hurt your company’s credibility, as it may suggest that your business is struggling or has been run irresponsibly. A checkered credit history can also affect your ability to obtain the necessary inventory or upgrade your equipment, and it can even affect the amount you pay for utility services.
Your business’ credit score will change over time, and there are things you can do to improve your score if you’re not happy with it.
The best way to improve your score is by making on-time payments. All three of the business credit agencies place great emphasis on payment history and recommend paying on time or even ahead of schedule.
Do you know how much of your available credit your business is actively using? The credit bureaus do, and they analyze this credit utilization ratio when determining your score. As an example, increasing your credit limit or opening a new line of credit while expensing the same amount on your credit will lower your ratio. As a general rule, you should aim to use less than 15% of your available credit.
If you already have a low credit ratio, opening a new credit account for a supplier or service you frequently pay on time can help increase the history of positive items on your credit report.
Just like with your personal credit, it’s important to review your business’ credit history to make sure the information is accurate and up to date. If you see something on your credit history that shouldn’t be there, it’s essential to address it right away. You should be able to work with your creditors and the credit reporting agencies to remove inaccurate information that may be hurting your credit score.
At Team Financial Group, we offer flexible payment terms tailored to meet your business needs. Even if you have a low credit score, don’t get discouraged — our commercial financing experts are here to help, and we’ve been able to provide financing for businesses with all types of unique circumstances. Our application process is easy and won’t affect your credit score, so apply today to get started.
If you have any questions about our financing application process or which financing option is right for your business, fill out our online contact form or give us a call at 616-735-2393. We’d love to chat with you about your options.
When you need equipment to start a new business, expand operations, or update existing systems, figuring out how to finance your business needs can be a headache. This is especially true if you have unique business requirements or are a small business without the resources for traditional financing.
Independent lenders like Team Financial Group typically offer any combination of loans, leases, and financing agreements. But sometimes, the average business owner can get lost trying to understand their options.
In this article, we’ll discuss the differences between loans, leases, and finance agreements and explain how to decide which one is right for your business.
The difference between loans and leases is relatively straightforward, but equipment finance agreements blur the lines between loans and leases. In this section, we’ll describe some of the main features of loans, leases, and finance agreements and highlight one of the main differences, which is ownership.
Also, note that leases come in two main types: operating leases and capital leases. In this blog, when we say “lease,” we mean an operating lease. Capital leases (such as a $1 buyout lease) and equipment finance agreements are essentially the same.
Loans are used to borrow money for the purchase of equipment, to acquire real estate, or to finance receivables and inventory. If you’ve ever had a car loan, an equipment lease is essentially the same, only with a larger loan amount. With an equipment loan, you typically only borrow a portion of the money you need to purchase the equipment and make up the difference with your own finances in the form of a down payment. The debt will appear on your balance sheet, and you may expense the interest and depreciation on a monthly basis.
Loan agreements are between a lender and you, the borrower. A loan contract details how much you borrowed and at what interest rate you will pay it back over a set amount of time. (Your credit score and other factors can affect the details of the loan agreement.) With a traditional loan, the principal and interest vary from month to month depending on how quickly you are paying the loan back and whether you pay before, on, or after the day your payment is due. So, your loan payments may fluctuate over time. You can work with a financial institution or an independent financing partner like Team Financial Group to get an equipment loan.
Ownership: Your business owns the equipment purchased with the borrowed money.
Operating leases are rental agreements for the use of equipment. If you’ve ever leased a new car, then you’ve had an operating lease. With an operating lease, you do not own the equipment. Lease payments are generally fixed, and many financing partners will offer 100% financing through an operating lease, meaning you don’t need any down payment.
Leases are popular options for equipment that quickly becomes obsolete, such as equipment or technology that needs frequent upgrades. Examples of equipment that many businesses lease include:
Ownership: The lessor owns the equipment throughout the life of the lease. At the end of the lease term, you typically have the option to buy the equipment for the current fair market value (FMV), return the equipment to the leasing company or the equipment dealership (if you leased through the vendor), or continue to make payments and lease the equipment.
Equipment finance agreements (EFAs) are similar to loans, but they aren’t traditional loans like we described above. With a finance agreement, your amortization schedule stays the same regardless of when you pay each month and how much you pay. Your equipment finance agreement won’t have stated interest rates, and the balance won’t break down into principal and interest. Instead, your finance charges will get calculated into the series of fixed payments you make over the term of the finance agreement.
So, the way you pay back a finance agreement is very similar to the way you pay back a lease. Much like with a lease, 100% financing of your entire equipment purchase is available with no down payment. However, with a finance agreement, you own the equipment outright like you would with a loan, and the debt appears on your balance sheet.
Overall, you can think of a finance agreement as a financing option that combines the ownership aspect of a loan with the financing structure of a lease. These agreements are often used to purchase assets that retain their value and equipment you plan to use long-term.
Ownership: Your business owns the equipment and pays back the loan with fixed monthly payments.
RELATED ARTICLE: How to Choose the Right Commercial Lender
So how do you know which commercial financing option is the right fit for your business needs? At Team Financial Group, we look at a variety of factors to determine your best financing option. But if you’re interested in gaining a general idea of what to expect before you apply, you can ask yourself these three questions.
1. What Type of Equipment Am I Financing?
If you’re looking to purchase equipment that will require frequent upgrades or will become obsolete in a few years, an operating lease may be your best option. A lease allows you to manage the costs of continually updating equipment because you don’t own the equipment and don’t have to keep it at term end. Instead, at the end of your lease term, you can choose to enter into a new lease agreement so you can obtain the latest and greatest equipment models.
On the other hand, a financing agreement may be better if your business is expanding and needs additional heavy equipment that will keep a lot of residual value throughout the years. You will own the equipment right away, with a fixed term and fixed payment protecting you against rising interest rates. Your company is then able to depreciate the equipment any way it sees fit.
2. Do I Have Any Unique Financial Considerations?
While the type of equipment you require and how long you plan on using it are essential considerations, sometimes your business has unique needs that also affect which option is right for you. As an example, companies in industries such as construction, landscaping, and masonry may have seasonal changes in their cash flows. At Team Financial Group, we can work with these seasonal changes and create a payment structure that best fits your company’s needs. A seasonal cash flow may indicate that a customized lease that provides flexible payment options would be the best fit, as was the case for one of our agricultural clients.
3. Do I Need the Financing to Cover All of the Equipment’s Cost or Only Part of It?
Equipment finance agreements work well when you want to own the equipment and need to cover 100% of the cost of equipment with financing. However, if you have capital available to make a significant down payment on the equipment, Team Financial can use that to bring your payments down to a level that fits your cash flow.
At Team Financial Group, we offer leases and finance agreements that we can customize to fit your unique business needs. We’re dedicated to helping our clients grow and thrive by providing efficient and flexible financing options and personalized service.
Ready to get started? Applying is easy! Just visit our application page, fill out your contact information, and one of our commercial financing experts will get in touch to help walk you through the application process and determine which option is right for you.
If you have questions or concerns you want to address before you begin the application process, we can help. Get in touch with us by calling 616-735-2393 or by filling out our convenient online contact form.
For some people, applying for commercial financing is business as usual. However, for first-time applicants, it can seem like a daunting undertaking. What does it take? Do you need to put on a coat and tie and go to the bank? Do you need to knock the dust off the last several years of tax returns? These are all valid questions, and they can create some anxiety about applying for financing.
At Team Financial Group, we make the application process easy and convenient for our customers. Keep reading to learn more about what you can expect from this process.
Your potential lender will evaluate your application based on a few factors that can typically be identified on a simple one-page application.
Your application will need to include:
The lender will verify that the business name exists and is registered at the state or local level. Be prepared to identify the business type (such as an LLC, corporation, sole proprietorship, etc.) as well as your business’ employer identification number (EIN).
You’ll need to identify the business address and mailing address for your company as well as the phone numbers of key contacts. This will help expedite the approval process.
In order for the lender to access your personal credit scores, be prepared to provide your name, home address, and Social Security number as well as a copy of your driver’s license.
The best way to provide this information is with a specific quote from a vendor that details the equipment and purchase price. However, if you haven’t gotten that far yet, a brief description of the intended purchase will do. Other relevant information that may apply to your equipment purchase includes:
For larger loan applications, you should be ready to provide business financial statements or tax returns for at least the last two years. At Team Financial Group, we would start to require this information when the loan request or total exposure with a business reaches $100,000, but this requirement can vary depending on the size of the business.
Many businesses use an accounting system such as QuickBooks that can quickly provide an income statement and balance sheet. Other businesses may have CPA-prepared financing statements that can easily be forwarded on to your lender.
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All lenders are different, so we can’t speak to the processes of every lender. In general, the lender will use the information you give them to take a good look into the creditworthiness of your business. To determine how much risk is involved in lending to your business, the lender may take the following steps:
At Team Financial Group, we take a personal approach to every financing request. Our experts can help you get organized and gather the information to secure the financing you need.
If you have any questions about our financing approval process or which financing option is right for your business, fill out our online contact form or give us a call at 616-735-2393. We’re here to help.
The content provided here is for informational purposes only. For financial advice, please contact our commercial financing experts.