Obtaining financing for large equipment can be easy if you have perfect credit. But it can be more difficult when you’re just starting out, or have bad credit. The U.S. Small Business Administration reports that 27% of businesses don’t grow due to a lack of credit.
If you want to increase your chances of getting financing for that heavy machinery for sale, take a look at the following tips.
Provide supporting documentation for any pejorative information about your credit history. For instance, if you have a judgment that you’ve since addressed, submit the supporting documentation to prove this is the case.
Most small business owners also struggle with accounts that show open cases, even when they’ve been paid off. If this is the case for you, be prepared to present documentation showing this to be true.
Compensate a bad crediting rating
If your credit score is weak, find ways to compensate for it. For example, you can offer a large down payment and slow-depreciating assets as security. This strategy is becoming more and more common for growing businesses that need heavy machinery.
Use previous financing
If you’ve already secured large equipment through financing, you can use your lender as a reference. As long as you have a good payment history, this could help secure your loan.
Remember to also include any other financing from your business, like repair work, commercial vehicles etc.
Show your cash flow
If your company is doing well, get that information to your lender. For instance, bank account statements showing your net income is twice as much as the payments will give lenders confidence that you can repay the loan.
Always keep in mind that strong cash flow is a great persuasive factor, especially for lenders who expect you to pay through ACH.
Potential financing companies will also want to see you already have work lined up before approving your equipment loan. So if you have POs with delivery dates, be sure to get them in front of your financiers. It shows you can begin earning income as soon as you secure the large equipment.
Getting large equipment can make your processes seamless and effective. But it can be extremely difficult for startups and business owners with bad credit. With these tips, you can secure funds to buy heavy machinery for sale.
What makes a Lyon Auction unique is that all of the equipment is in the same location. Companies are able to liquidate a large fleet of vehicles in a single auction. Lyon Auction is able to help well-known companies from the conception to the conclusion of the auction. This makes it headache-free and as enjoyable as possible for both the seller and buyer. If you have any questions, feel free to contact us, we’re listening!