4 Common Business Equipment Financing Myths To Avoid In 2012

By Author: William Brewer
Total Articles: 6
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Amidst an economic recession, the financial markets—and financing in general—have changed dramatically. As a result, you may have found yourself confused about how business equipment financing actually works.

To help set the record straight, keep reading to discover 4 common business equipment financing myths you should disregard when researching how to obtain equipment for a business you’ve started.

Business Equipment Financing Myth #1 – Only Perfect Credit Has A Shot At Getting Money

This is one of the most common misconceptions business owners have…

The truth is, though the amount of institutions that provide loans has decreased, the criteria you will face as a borrower looking to get approved, has not changed much at all.

In reality, financial service providers have simply become a lot more thorough in their underwriting process.

To determine whether or not you would be eligible, areas such as how long you’ve been in business, the stability of your bank accounts, current income and trade sources, all come into play.

Business Equipment Financing ...
... Myth #2 – “Underwriters Are Out To Get Me”

It is easy to feel like a lender’s underwriters are taking shots at your eligibility, but it’s nothing you should take personally.

Underwriters are tasked with gauging your level of risk as a borrower and, in the event they approve your business equipment financing, that you will be able to pay it back completely.

Simply put, it’s their job to be critical.

One thing you can do to make sure you get the answer you deserve, is to review your current credit report before you submit your application for financing.

You can get free access to your credit report once a year, at http://www.annualcreditreport.com.

By using that site, you’ll be able to review what each of the three major credit bureaus (Experian, Transunion and Equifax) have on file.

When you get your report(s), make sure everything is accurate and that you immediately dispute anything you feel is an error.

Business Equipment Financing Myth #3 – All Leases Are 100% Tax-Deductible

Borrower beware!

Although tax deductions are a popular focal point in finance companies’ marketing, the truth is that not all leases are the same.

The best advice, would be to consult with your accountant before signing your contract, especially if being able to deduct your lease is a major selling point for making a decision.

Also remember that the IRS has very strict standards on what qualifies as a “true” lease.

Business Equipment Financing Myth #4 – “My bank rejected me, now I have no chance…”

If you’ve heard this or recently been rejected by a bank, then you’ll be happy to know this is another common misconception!

In general, banking systems in the United States are the most heavily-regulated in the entire WORLD.

As a result, there is absolutely zero leeway for you as an individual person or business entity.

The good news, is that if you are rejected by your bank, you can still apply directly with a finance company that specializes in getting you what you need.

More importantly, finance companies and captive lenders have a high level of motivation to help you get approved, because they don’t get paid until you are officially approved.

Unlike banks, their guidelines are also less strict.

That means even if your credit is less-than-perfect, you can still get approval for your business equipment financing!

Of course, you might be required to pay a higher interest rate, but you benefit by being able to proceed with building your business and its assets.

One way to decide whether paying higher interest is worth it, is to see whether or not it (the higher interest) is offset by the extra money you’ll be able to
generate with the equipment you’ve financed.

If you still have any concerns about business equipment financing, the next step is to get in touch with a certified financial professional.

For a free, no-obligation analysis of your financial needs, visit http://www.ibfcommercialloans.com today.

William Brewer is the founder and CEO of Industrial & Builders Finance, LLC., a company that helps business owners with any credit status find the capital they need to start, grow, and expand their business. Bill and his experienced team can help you get money for your business, the fast and easy way. Visit http://ibfcommercialloans.com to learn more about how you can get financing for your business today.