How to qualify for equipment financing.

Equipment financing is a cost-effective and efficient way for small businesses to acquire needed assets to increase profitability. Investments in software and equipment are expected to exceed $2.3 trillion dollars in 2022. Now that Presidents Biden’s new $ 1 trillion infrastructure bill has become law, having the right equipment financing strategy is a mandate for many businesses.

Here is what small businesses need to qualify for equipment financing.

1. Time in Business: You will need at least one year in business.

 2. Existing Revenues: Lenders will want to see solid revenue growth with monthly deposits through your business bank statements.

 3.Personal FICO Score: Yes, having good personal credit really helps. Some lenders will need at least a 650 Fico score. They will also look at comparable business loan tradelines, credit utilization (existing debt versus available credit), and credit depth (usually looking for at least 5 to 7 solid multi-year tradelines).

 4. Business Credit: Business credit is often overlooked. It is however a very important baseline for business lenders. Many lenders are using Paynet (a division of Equifax) to make business credit assessments on your company. A Paynet score over 690 is considered very good.

 5. Equipment’s Impact on your bottom line: Lenders will ask you to tell them the equipment’s financial impact on your bottom line. Make sure to know that and provide in detail. This is overlooked but vital component in any approval.