How to Qualify for Financing and What to Expect as a New Business Explained by Dallin Hawkins From Integrity Financial Groups, LLC
Midvale, Utah, January 3, 2017 (Newswire.com) - Dallin Hawkins, Director of Sales & Operations - Integrity Financial Groups, LLC explains, How To Qualify for Heavy Equipment Financing, Semi-Truck Financing and Commercial Truck Financing:
Typically, if you’re a startup business, banks or dealers will not be able to provide you with the financing that you need for your heavy equipment, semi-truck or commercial truck. In the rare case they do, the finance company will want a large percentage down and the rates might be high. Most equipment leasing companies only work with established businesses and this is why.
Startups are companies that have been in business for less than 2 years. This 2 year mark is the “magic number” so to speak because statistics show that 75-90% of businesses fail within the first 2 years. This is why most finance companies only provide heavy equipment financing, semi-truck financing or commercial truck financing to companies that are established.
Typically if you're a startup business, banks or dealers will not be able to provide you with the financing that you need for your heavy equipment, semi-truck or commercial truck. In the rare case they do, generally the finance company will want a large percentage down and the rates might be high. Most equipment leasing companies only work with established businesses and this is why.
If you are a new business, congratulations! That Entrepreneurship is what makes the American Dream possible. Just understand that your heavy equipment, semi-truck or commercial truck will cost you a bit more. You now know the reasons why.
What To Expect As A New Business:
As a new business, here’s what you can expect as far as financing goes:
If you have good credit, you can usually be approved for your heavy equipment, semi-truck or commercial truck even if you just started doing business last week. The rates are nowhere near what you would pay if you had been in business 5+ years, but they are reasonable. The details of startup financing vary depending on a few factors. These include: home ownership, personal net worth, cash flow, equipment type and equipment age.
If you have poor credit, you can still get approved for your heavy equipment, semi-truck or commercial truck but it is going to require that you have sufficient cash flow. If your credit is lower than a 600 FICO score, you are going to need 50% to put down or free and clear collateral that you can pledge. If your credit is greater than 600, you might only need 10-25% depending on the amount you are looking to finance.
You also will be limited to how much you can borrow requiring a large down payment. Some of these programs may be expensive, but they are a necessary vehicle to get you the funding needed for your heavy equipment, semi-truck or commercial truck to make what we hope to be a healthy income. Keep in mind many lenders value the relationships of their clients, or at least the ones who make their payments anyway, for further transactions. For example, if you had poor credit and have great pay history, the lender may give you a better deal on the following transaction. This could be anything from a better rate to a lower down payment or a higher approval amount for newer equipment.
In the end, starting a business is very exciting and can give you financial independence. There are many things to take into account when looking for your first semi-truck, commercial truck or piece of heavy equipment. If you are a startup and are worried about the additional financial costs, consider starting off with a used semi-truck, used commercial truck or used heavy equipment to get your company started making money. The overall cost will be less, the finance costs will be less, and it may put you in a great position for expansion at a later time. Do your homework and look for the best path that will open doors and not close them. Now go make some money!
- See more at: http://equipmentfinanceservices.com/financing-new-business/#sthash.kRn5em6m.dpuf
Source: Integrity Financial Groups, LLC