Startup companies have many financial needs, financing for equipment purchases or leases being one of them. Obtaining equipment through financing with traditional lenders is difficult. Startups usually don’t have the credit history to qualify for bank financing. Even if they do qualify, traditional lenders limit financing amounts to $25,000 to $50,000. If your startup’s essential business equipment costs more to buy or lease, then you’re back at square one trying to find another lender to make up the balance. If you don’t have A-type credit, your lending options dwindle.
Nobody launches a startup thinking it will fail. The Small Business Association’s (SBA) statistics state: 30 percent of new businesses fail during their first two years; 50 percent during their first five years; 66 percent during their first decade; and 25 percent make it past the 15-year mark. Startups that mature to established companies succeed through a combination of strategic business planning and available funding for equipment to accommodate growth.
Having essential business equipment is vital to launching and growing your company. With the right equipment you can be competitive in your industry, increase efficiency and productivity, lower your costs and even expand to new markets. So, what are the ways startup owners can fund equipment purchases or leases for their companies?
Dip into Your Company Cash Reserves
Spending your cash reserves to purchase equipment makes the transaction simple and fast. No equipment financing application, no waiting, and you own it. However, using your cash reserves can leave your business (and you) unprepared for emergency situations, economic downturns and unable to take advantage of opportunities that require cash on hand.
LEARN MORE: THINK EQUIPMENT FINANCING BEFORE DIPPING INTO CASH RESERVES
Use Your Personal Funds or Credit
Again, nobody launches a startup thinking it will fail. And, business owners will go to great lengths to avoid failure, even using their personal funds, savings and credit to support what the company needs.
You’d be hard pressed to find a business advisor who recommends putting your personal credit at stake to shore up a business. Should the business default, creditors can seize any personal assets you may have left, including your home, vehicles and more. If your personal funds have been spent on the business, that leaves you little with which to start over, personally and professionally.
Partner with a Business Equipment Financing Provider
Financing an equipment lease lets you get the equipment your startup needs, as well as makes budgeting and cash flow management easier. Your lender should take the time to understand your business and goals, yet be quick to communicate about your loan decision. As a direct lender, Global Financial & Leasing Services is able to approve credit with our in-house funds, and the typical turnaround time is 24 to 48 hours, not weeks or months.
When other lenders say no to financing essential use equipment, GFLS can often say yes, so tell us about your financing needs. Your financing application only reveals part of the bigger picture of you and your startup. Along with credit scores, GFLS believes in character and treating every applicant with respect and kindness.
GFLS offers flexibility on how much equipment financing we can approve, funding applications up to $1 million dollars. We know what it takes to be a successful startup. In fact, Jim Jenks, founder and CEO, has been a part of four different startups in his career, with GFLS being the most recent successful venture.
See what a difference applying for equipment financing with GFLS can make in getting your startup off the ground.