For a new business, trying to get a bank loan can be a challenge especially without business credit history to back up your loan application.  If you need equipment financing is an issue, perhaps you may consider business equipment leasing?

Who Can Lease

Both new and established businesses are eligible to apply for equipment lease financing.  In fact, this financing technique has been employed by many small businesses and large corporations for a long time.

Why Lease Equipment

Rather than apply for a bank loan to buy the needed equipment, a new business owner can apply for a “lease” to avoid unnecessary delays with the business operations.   Instead of waiting for months to get their business loan approved, leasing equipment involves a quicker and uncomplicated procedure.

Add to this, equipment lease financing is generally cheaper since it does not require a down payment.  Many leasing companies offer flexible repayment terms (monthly, quarterly, bi-annual, annually) to complement the business’s needs.

Indeed, equipment lease financing is recommended for smaller businesses.  By leasing equipment, the business owner can use its working capital on other expenditures such as purchasing supplies, hiring workers, advertising your products and services, instead of spending the money on devices or special machines.

Preparing Paperwork

What kind of paperwork do you need to prepare?  The specific requirements may vary from one leasing firm to the next.  Still, most lessors generally require a written equipment lease proposal, the business’s recent financial statements, and tax returns.

Your lease proposal must clearly present the type of business you run, your reason for getting a lease, the specific machines or devices you need, and other important information about your company that will help convince your lessor to approve your application.

Check Your Credit

Some business equipment lease providers have strict standards and may call for good to excellent credit history.   Nonetheless, you can find lessors that offer leasing services even for customers with no credit history or with bad credit history.

In fact, even business owners who have a record of bankruptcy can get approved as long as the bankruptcy has been discharged.  If you have bad credit, it is a good idea to include a letter explaining the details about your bankruptcy or poor credit.

Tips For Sure Approval

For new business owners, do not test the waters by submitting multiple lease applications to different companies.  If a potential lessor sees too many inquiries in your report, it may raise doubt as to why other lessors are not willing to grant you a lease.

Keep in mind that not all leasing companies offer lease for new businesses.  Some lessors may require applicants to be at least 2 years in operations.  However, there are lease companies that do offer special lease arrangements for new businesses.

Find a leasing company that provides service to businesses in the market you belong.  For example, some lessors specialize in transportation while others may specialize in medical equipment, printing equipment, baking equipment, etc.  Check the prerequisites of a particular equipment lease provider so you can avoid unnecessary rejection.

If you are planning to get into a restaurant business, one of the biggest challenges you will face is equipment financing. Setting up your own restaurant demands a considerable amount of cash. For one, you need to invest on restaurant equipment such as stoves, grills, gas range, freezers, tables, seats, cash register, credit card machines, computer, etc. Think about how much start-up capital you will need to be able to buy all the necessary equipment and furnishing.

True, you can apply for a business loan, but if you spend all money on equipment alone, there may not be much left for other expenses such as marketing, supplies, and hiring workers. Is there an alternative financing option for aspiring restaurateurs? Rather than purchasing all the equipment and furnishing your business needs, why not consider business equipment lease financing?

Here are equipment lease tips that are especially for restaurant business owners:

Make Sure It’s NSF Approved. If you are going to lease kitchen gadgets like blenders, mixers, refrigerators, coolers, etc. you need to make sure that the devices all has the NSF (National Sanitation Foundation) Sticker. Commercial kitchen appliances that do not have an NSF Sticker may cost you levies and fines once your local health department conducts sanitary inspection.

Avoid Overbuying. With all the excitement of starting a business and having a restaurant place, some entrepreneurs may be overspending by taking on too many gadgets or equipment. Before ordering equipment to be leased, you should be realistic about your needs and consider your budget and the space.

Follow Local Regulations. You should know that there are specific regulations in furnishing a commercial kitchen. Before submitting your equipment lease application, make inquiries from your local health department, fire inspector, building inspector, and city zoning about the specific rules in furnishing a restaurant business.

Shop around. Compare and contrast proposals from various business equipment lease companies. Take a closer look at the prices along with the Terms and Conditions of the lessor.  Besides the equipment, will installation and maintenance services be provided as well? Can you expect a reliable customer service?

Analyze your lease contract. Never sign up for an equipment lease without examining all the stipulations in your contract. If you are not careful, you could get stuck with a bad lease and may not have much choice but to wait until your lease term ends.

Check your rating. Some commercial restaurant equipment leasing providers only grant approval to clients with good to excellent credit history. If you have bad credit, your application may get declined or you may be given high rates. Thus, it is advisable to check your credit report first before submitting your lease application. If you have good credit rating, you will be in much better position to negotiate for a lower interest rate or a more flexible repayment term.

Get free lease product distributors. Some product distributors do offer a free lease If you make them your official supplier. For instance, if you offer coffee and beverage in your restaurant, find a distributor that will provide you with a coffee maker or a freezer at no extra cost.

An education doesn’t come cheap today. You likely have a heap of student loans, that have built up over the years. Now, you may just be wondering how you will cope. Student loan consolidation programs are one way to cut out the need for headaches. Join me, as we take a look at some useful tips, that you can use right now, to find student loan consolidation programs, that meet your needs.

Looking at the data, we find that most students going through all learning will end up in tens of thousands of debt by time they can even start looking for a job that needs those skills.

The problem is not so much the loans. But, the high levels of interest. Even though students get some of the greatest rates, the student loans can add up. Wouldn’t it be nice to get better rates?

Getting student loan consolidation is a solution. And how it works is simple, and can make sense. Lenders like to loan out large amounts. It means they need less marketing, and less administration. If a person gets a $20,000 loan, it is easier and cheaper for them than 20 – $1,000 loans. This means you get a better rate, and your repayments could be consolidated to one loan, at a cheaper rate.

There are bad points to getting student loan consolidation programs to consolidate your student loans. For example, a student loan, because it is bigger than those small student loans, generally will need to be repaid over several years, if not even a decade or more.

A big benefit of student loan consolidation is that it is easier to manage. Student loans that come at various times in the month can really cause havoc on your finances. Having a repayment date for one loan makes life easier.

There are drawbacks to the benefits of easier management of loans by consolidating a loan. If previously, you found it easier to wiggle through all those student loans, you may now have a problem with paying back one big repayment.

To be able to get student loan consolidation, you will need to have loans that equal more than $10,000. This makes it not available to everyone, especially if you have only recently started your education.

A tip which may help you when you are looking to consolidate your student loans, is that some of the consolidation programs will try to attract you to the program with incentives. These incentives could be a lower initial rate, and this could work out worse off than finding a low rate in the beginning, that runs throughout the term of the loan.

The first thing you want to make sure you do is to do some research before choosing one particular student loan consolidation program. Online this research can be much easier, and finding online student loan consolidation programs is a popular route to getting the best deals. Make sure you do some research, as there are many different packages, even out of student consolidation loans that can give you great rates.

It is often said that buying a dream home requires huge expenditure for most of the investors. Some people spend a long period of time, garnering their savings to fulfil this dream, while others opt to take a loan (credit) to fulfill this dream.

Having done your self assessment about the repayment capacity, location of your dream home, amenities and other fancies that you would like your dream home to have. It’s time for some serious exercise of selecting your HFC.

Selecting a HFC requires extreme care and proper consideration, and therefore following the under-mentioned pointer will make this exercise easier. Past record of such institutions should be properly checked as it will be a long term relationship between you and institution. Ensure that the whole task does not end up becoming a whole day headache or nightmare for you, thus prudent steps while deciding upon the financer.

1. Rate of interest

This is where it all begins. Although the rate of interest offered by most HFCs is more or less the same on paper, some degree of bargaining in most cases, leads to a lowering of rates by as much as 0.25 to 0.50 percentage points. More so if your profile happens to match the requirement of the HFC. The lowering of interest rate has a significant impact over the long term although the difference is not so noticeable over the near term. For instance, a 0.50% interest rate ‘concession’ on an Rs 1,000, 000 loans over 20-year tenure will reduce your liability by upto Rs 72,000. But care needs to be taken to ensure that the difference is not being offset elsewhere by the HFC under the guise of other ‘charges’.

One must also be careful about teaser rate offer, as they are sometimes really teasing. They benefit you for a short-term – say couple of years (till the fixed interest rate tenure), but later as floating rate starts applying they dig a bigger hole on your wallet.

2. Calculation of the exact home loan amount

Here, HFCs differ in their calculation of the loan amount to be disbursed. Some HFCs calculate the amount to be disbursed on the basis of, say, the gross salary while some HFCs calculate it on the net salary. This might make a difference to individuals as the loan amount and the EMI will vary across HFCs. One needs to look into this and get a comparative analysis done across HFCs, to understand which HFC offers the best deal. Also one should check whether the HFC is offering pre-EMI and tranche based EMI repayment option. This will help one whilst taking loan for an under construction property, as this gives them an option to pay interest only on the portion of the loan disbursed or to choose the instalments they wish to pay, till the time the property is ready for possession.

3. After-sales service

And you thought after-sales service was synonymous only with consumer durables! No – it applies to practically everything, and so also applies to HFCs. In fact, it is very crucial while choosing an HFC. An HFC can differentiate itself with excellent after sales. Take the example of post-dated cheques (PDCs). It is general practice to give 36 PDCs during the time the loan is disbursed. It is after 36 months are over that after-sales will play a role. How diligent are the HFC’s follow-ups? Are they prompt? Are reminders timely? Moreover, during the financial year-end, the HFC should be punctual in giving the borrower interest paid certificate (components of interest and principal amount paid in the financial year) so that he can file the necessary documents for availing tax benefits (under section 24b and 80C of the Income Tax Act) on home loans.

4. National presence

The HFC should be present across the country or at least have branches in all major metros and towns. This provides an individual an easier accessibility. This assumes importance if the current job of an individual is of a transferable nature (e.g. bank job, defence personnel) or if he needs to make long and frequent outstation visits (e.g. consultants, businessmen). The individual shouldn’t be put through the hassle of couriering his cheques to the home branch every time or contacting the home branch, each time he has a difficulty or a query. So it helps if the HFC is well networked across the country.

5. Prepayment / Foreclosure benefits

For many individuals, this plays a significant role in their decision to go in for a particular HFC. For example, many salaried individuals know for a fact that their salaries would be revised every year. This means that they can pay a higher EMI going forward. Some of these individuals also know that they would be getting a bonus, which they can utilise to pay off their home loan (either fully or partly). Some banks do not charge individuals for making a prepayment / foreclosing their account. Obviously such HFCs should get preference over other HFCs that do levy a prepayment charge.

6. Do your homework

Many people have a tendency to buy into ‘brands’ rather than going for what suits them best. It’s not about how big the brand is; it is more about whether that brand suits your requirements and satisfies your criteria. Make a list of your requirements first and then home in on an HFC. Talk to people who have already taken a loan from a particular HFC and get their feedback.

Other factors like documentation, processing fees, document storage facilities and time taken for processing the loan should also be considered. For example, individuals do not like it if the documentation is an irksome process; or if the processing fees are exorbitant.

Apart from this, read all the terms and conditions carefully and do not forget to take an expert advice. Therefore, instead of reading on the lucrative offers of the company, it is important to read and understand the technical aspects of the offers. So if you want to be in a win-win proposition while dealing with the Housing Finance Company, the onus is on reading the fine print in the loan document and seeing through the maze of exciting offers.

While traditional lenders and banks have been sticking to their strict underwriting guidelines there are several creative business financing options that may just help get you the funds you need.

Before getting into the details let me be the first to remind you that separating your personal credit from your business credit should be your primary goal. If you’re at the early stages of building your company’s credit file then you may have to use your personal credit to secure financing until your company becomes creditworthy.

Merchant Cash Advance

This option has many benefits if you are in need of short term business financing. In a nutshell you are borrowing against your company’s future credit card sales in order to receive cash immediately.

Best of all you can qualify with bad credit, no personal guarantee and no collateral.

Some of the requirements are: -At least 9 months in business -Process $5k or more in monthly credit card sales

Finally your repayment is based only on your credit card sales and it’s automatically debited so you don’t even have to worry about a payment schedule.

Social Lending

Lending networks like Lending Club and Prosper provide a way for you to obtain creative business loans that range from $1k to $25k for your business. Rather than go through all the red tape that traditional lenders impose on you these networks make the process so much easier. You simply post a loan listing and set the rate you want to pay and they do the rest.

The rate is fixed and so are your payments but best of all you don’t have to take the loan if you don’t like the rate.

Some of the requirements are:

*Personal credit score of 640+ for Prosper

*Personal credit score of 660+ for Lending Club

*Debt-to-income ratio of 25% (excluding mortgage)

Even though you’re securing the loan using your personal credit the interest rate you will pay is much less than the rate you will pay if you use your personal credit cards for funding.

Vendor Lines of Credit

Another alternative to creative business loans is obtaining vendor credit from your suppliers and other companies whose products and services you can use. This not only helps you conserve cash flow but also builds your business credit file too.

In most cases you can qualify with no personal credit check or guarantee which supports your overall business credit building strategy.

Equipment Leasing

When you need business financing for business equipment and you can’t secure finances through traditional sources like a bank than leasing is a viable alternative. You not only benefit from tax deductible lease payments but you also can get a buy-out option as well.

In addition you get a low fixed rate and a low down payment which is usually one or two lease payments upfront. Compared that to a traditional loan, where a bank requires up to 20% down of the total price of the equipment.

As you can see there are many creative business financing options that will provide your business the financing it needs short term or long term while you continue to work on establishing the creditworthiness of your company.