When you need equipment for your business, you don’t always have time to waste. Getting an equipment lease approved quickly can drive business growth and give you a competitive edge, especially in a time where technological advances are being made at lightning speed.
Keep reading to find out what you can do to get your application for an equipment lease approved as quickly as possible. Learn how to prepare the right documents for your application and what types of information potential lenders will want to access. Find out what type of equipment finance application is more likely to be approved quickly, and what you can do to improve your chances of success.
Tips for getting a lease approved quickly
Overall, getting a lease approved quickly involves several key factors:
- Choosing the right financing firm according to your needs
- Maintaining a good credit score
- Verifying that your credit report is accurate and up to date
- Providing a clear business plan to demonstrate how you will use the equipment and the benefits it will bring your company
- Possibly providing a co-signer
If you come prepared with all the right information, you can save time on getting your application approved.
What you need to get approved for a lease
Different equipment financing companies may have varying requirements when it comes to financing a lease. However, there are a few elements of an equipment lease application that remain the same across the board: credit score, credit report, business track record and an explanation of what you will use the equipment for.
Business credit score
Your business credit score indicates the financial health of your business at a given time. It will definitely impact your ability to qualify for an equipment lease. As there are different models that can be used to calculate your credit score, we recommend referring to a reputable company to verify your rating, such as Equifax or TransUnion in Canada. By providing a credit report from a dependable, respected source, you can save time on wasted applications and research once the application process has begun.
Lenders will generally feel that you are a low-risk borrower if your score is in the Good (670 to 739), Very Good (740 to 799) or Excellent (800 to 850) range. You may have a more difficult time qualifying if your score is Fair (580 to 669) or Poor (300 to 579).
Qualifying for an equipment lease with a high credit score
If your business credit rating is strong, you can look forward to paying the best possible rates, and possibly even be exempt from certain fees and some types of paperwork.
A high credit score puts you in a strong position as a borrower: remember, you should request information from several different lenders before signing a contract to make sure you are signing the best possible contract for the equipment you need.
Qualifying for an equipment lease with a low credit score
A low credit score does not make it impossible to qualify for an equipment lease, but it makes it more difficult. You may need to do some extra paperwork, possibly provide collateral and may even pay a higher rate.
If your credit score is currently lower than you would like, there are a few things you can do to improve it:
- Pay your bills on time every time.
- Pay off your debts as quickly as possible.
- Keep your credit card balance well below its limit (possibly by increasing your line of credit).
- Avoid applying for multiple credit accounts within a short time period.
- Check your credit reports regularly to confirm that there are no errors and that all information is correct and up to date.
- Verify that the suppliers and vendors you work with share payment data with your credit reporting agency.
- Ask any collection agencies you have paid to delete the negative account from your credit report.
Business credit report
Your business credit report is a detailed record of your credit history. While your credit score gives a quick view of your status, your report includes all your business financial activity, starting from the moment you open up a bank account.
A business credit report contains even more comprehensive information than a personal report. It will describe your business in detail, including payment history, credit accounts, public records, credit inquiries, finances (revenue, assets and liabilities) banking information, risk assessments, and more.
Your credit history affects your ability to get a loan quickly, and it’s important to be familiar with your credit record and keep it as clean as possible before applying.
Financing institutions will examine only the business credit report for a corporation, but in the case of partnerships or sole proprietorships, your personal financial situation will also be taken into consideration.
A poor credit report can potentially influence a lender to refuse your application completely. If you have filed for bankruptcy, undergone debt consolidation, filed a consumer proposal or frequently defaulted on payment within the last 5 years, you could be refused an equipment lease.
Business track record
Businesses can be eligible for an equipment lease whether they are a new start-up or have already been active for many years.
Ideally, you should have at least 2 years of business activity behind you to show lenders that you are reliable, responsible, and capable of strategic planning, therefore a good credit risk.
To get your loan approved quickly as a start-up or business that has been in operation for under 2 years, you should be ready to provide personal financial statements and tax documentation as part of your application.
Why you need the equipment and what it will be used for
Lenders want to know why you want a particular piece of equipment. They will approve your application more quickly if you make a strong case as to what you will use the equipment for and the benefits it will bring you. Why? Because if you can prove you will be putting your equipment to good use to make your business thrive, you are showing that you will be more likely to be able to pay off the lease in the long term.
Basically, it’s your job to explain why the equipment you’re applying to lease is a good investment for your business.
Here are a few things to keep in mind:
- The broader the potential use of the equipment, the more easily you can get it approved for a lease
- The more specific the equipment use is (for niche industries, such as forestry) the more difficult it is to get a lease approval
- If the equipment cost is low, but the resale value is high, there is less risk and you are more likely to be approved quickly. Tip: Consider what type of equipment you want to lease, and assess whether your goal is realistic before making an application. This way, new businesses can save both time and money.
- By making a clear and compelling argument for how the equipment will benefit your business ROI, and why you need it now, you will improve your chances of getting a lease approved quickly.
It can also be helpful to get informed about the types of leases available before making your application. By understanding the ins and outs of different lease agreements, you can apply for the type of lease that is best suited to your financial reality.
Time frame for getting a lease approved
What exactly does it mean to get a lease approved ‘quickly’? At Soluco, we offer equipment leasing in three easy steps. First, find the equipment you want to lease. Next, fill out our easy application form. Finally, get approved in as little as 24 to 48 hours! When you need equipment quickly, you can’t afford to wait weeks or months for an answer.
Fast approval on equipment leases for Canadian business
Soluco provides equipment leasing to businesses of all sizes. Whether you are a startup looking to acquire construction equipment through leasing, or an established business looking to expand your fleet of trucks or finance new excavating equipment, we are here to help.
Leasing is a viable option for acquiring equipment both for the short and long term, without upfront capital. Contact Soluco today to get your lease approved as quickly as possible, under the best conditions.