Times are tough… we know, we hear it all the time. While it may seem as if commercial lending has all but dried up in the current economy, many small businesses have found that equipment leasing companies offer some flexible financing options, even in this tough economy.

If you are a business owner that has weathered the economic storm over the past few years, you’ve probably seen your competition going out-of-business at an alarming rate. Their exit from the marketplace might have your business poised for growth as the economy picks back up in the 3rd and 4th quarters of 2009. That is… if you are able to acquire the necessary capital equipment needed to accommodate the additional clients/jobs. With banks tightening lending requirements and sometimes, exiting markets all together, leasing companies have been using their asset-based expertise to their advantage. By truly understanding the value of a given asset, an equipment leasing company can structure a lease/loan with no additional collateral besides the piece of financed equipment.

Over 80% of businesses in the United States utilize equipment leasing options as a means of business financing. Equipment leasing approvals are generally available in as little as 48-hours for amounts under $75k, with larger commercial approvals up to $3MM available after full financial disclosure. The majority of businesses turn to equipment leasing because of the flexibility it affords. With credit approval, an equipment lease can be executed with only one month’s payment due in advance. This can be a HUGE help, especially when compared to the 15% traditionally required to initiated bank loans and credit lines. If you are involved in a high-tech industry, or one which requires constant equipment upgrades, you’ll be happy to know that equipment leases can be structured with upgrade options. The ability to upgrade your equipment down-the-road means never having to worry about technology obsolescence.

So who qualifies for commercial equipment leasing programs? While the application requirements vary, generally any sole proprietorship, LLC, corporation, partnership, or freelance professional can apply for commercial financing options. Credit approvals up to $75k are generally available on an application-only basis, with personal guaranties of the majority owners (if a closely held company) being required. For amounts over $75k, expect any reputable leasing company to request business financial statements to assess a company’s financial strength.

When applying for an equipment lease, you should have the following information handy and ready to supply for final credit approval:

1. Trade References- 3 companies from which you purchase goods/services from on a regular basis.
2. Business Banking Statements- Copies of the first page, showing average daily balance, for the three latest months.
3. Exact Legal Business Name- Needed to verify time-in-business (TIB).
4. Personal Information on Majority Owners- Anyone owning more than 15% of a company will need to provide personal information (name, address, social security number) and sign a credit authorization to begin the credit application progress.
5. Financial Statements/Tax Returns- For financed amounts over $100k, be prepared to provide an equipment leasing company with two-years federal tax returns, as well as a current interim statement with balance sheet/profit & loss statement. Additional financials will be requested as needed, on a case-by-case basis.