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Not so long ago, financial institutions made these huge loans and lines of credit to customers who didn’t have the courage to repay the loan. These institutions ended up severely burned in the back with loans that were delinquent and eventually cancelled. Approval for these home loans and lines of credit has been greatly tightened in recent years. However, depending on the type of loan you are looking for, there may be a great opportunity to be among the many that are being easily approved in the market.
If you need equipment financing, you may be in a great position. In March, the Equipment Financing and Leasing Association (ELFA) agreed that now is a good time to get involved in an equipment loan or lease. In February, the amount of new equipment finance loans decreased 6% to equal $4.7 billion, which is the lowest the industry has seen in the past two years.
Lenders, whether bank or independent, are very eager to put these equipment loans in the hands of entrepreneurs for a couple of reasons. First, because these loans are not money tied up on a bank’s balance sheet, like a line of credit, they are less risky for banks. Additionally, people who take out a manufacturing lease, construction loan, or any other type of equipment financing end up with an asset that produces income for the business as a whole as a result of these leases. This makes the motivation to pay the loans and also on time much greater. The nature of these loans places them among the lowest in the industry -2%- in terms of delinquencies. Cancellations are even lower at a rate of 4%.
If you’re even thinking about renting equipment, now is the time to talk to a bank or independent financial institution. They will work with you even if you have bad credit to get a loan that is right for you. Equipment finance companies have had a 74% approval rating when it comes to clients, which is a high number. Some rates on these loans are even as low as 2%-5%. Be sure to speak with a specialist who has had a lot of experience with all types of loans and leases so you can get the best information to find the right one for you.