Commercial Lease Pro

Bob Newman asked:


Commercial Equipment Leasing is basically a search for the right leasing arrangements that can help your company get the right commercial equipment that you need under the right terms that are affordable for you. A Commercial Equipment Leasing vendor might offer a lease as cheap as $5,000 or one that maxes out at $5,000,000, under leasing terms of at least one year to a maximum of seven years.

It is also good to seek out a Commercial Equipment Leasing vendor that has lengthy experience in customizing the Commercial Equipment Leasing contract to meet your budgetary and operational needs. Under an affordable Commercial Equipment Leasing contract, your company is bound to progress further and even become quite profitable. This is because the right terms and rates will permit your company to make only the payments it can afford based on its rate of income, while being able to reap savings that it can use for future business needs or invest in a financial instruments tool.

Ideally, the Commercial Equipment Leasing vendor you select would offer a tiered set of Commercial Equipment Leasing plans that you can examine and make your choice from. Try to find out if your vendor offers Commercial Equipment Leasing options like deferred payment terms, and seasonal payment terms. Taxes are another aspect of Commercial Equipment Leasing that you might want to look into (and remarkably a lot of people overlook this crucial point, it seems, in their rush to get a Commercial Equipment Leasing contract immediately.) If you cannot understand taxes well, or need someone who specializes in this field, get a certified public accountant on your team.

Commercial Equipment Leasing is a better option to simply outrightly borrowing money from a lender (like from a bank) because with a bank you will probably use the loan amount to buy equipment that you need. Not only are you then saddled with equipment for as long as it is still operational, but if you opt for a bank loan you will be eating up the credit line that you could be using for other more important business needs. Commercial Equipment Leasing, on the other hand, means that you gain a new credit line that can be used mainly for Commercial Equipment Leasing – this leaves your other credit lines intact for when your business really needs them.

The option of Commercial Equipment Leasing is open for customers like businessmen as individuals, non-profits, associations, and of course, companies. Commercial Equipment Leasing customers may have to pay up-front costs (usually the first month of payments and the last month fall into this category) to be able to get their Commercial Equipment Leasing application approved by the lender.

You have to examine the fine print of your Commercial Equipment Leasing contract closely to see what you are agreeing to exactly. For instance, you need to understand that some Commercial Equipment Leasing vendors may not allow you to back out of the contract once it has been signed. The borrower may then find himself saddled with a contract he does not really want if he hasn’t been paying attention.

Bob Newman asked:


There are two ways to pursue Commercial Equipment Leasing – either you try to get that loan from a traditional lender like a commercial bank or you pursue loans from non-traditional lenders. The difference is that traditional lenders like a bank will require you to produce evidence of a very good (even excellent) credit score and that you have a history of being a good borrower (meaning, someone who pays loans on time.) In itself, this is not bad since most banks are secure lenders. The problem lies in the fact that if you pursue commercial equipment leasing with your bank, you are actually eating away at your own credit line with the bank. For each commercial equipment leasing transaction you take out, a portion of your credit line is used up (as recorded by the leasing department of the bank.) This is because any transaction you make with the bank will be counted as part of your cash borrowing capacity or term leasing activities.

Another mistake many small business owners make is to mix up their personal credit lines with their business credit lines – which should never be. Although your personal credit score, credit rating, or credit history will show a lot about you as a personal loan borrower, it does not adequately show how you perform as a businessman – for that, the bank or other lenders will have to examine the company’s own credit history instead.

What you should also bear in mind about pursuing Commercial Equipment Leasing is that you should also be scrutinizing the lenders themselves before you submit yourself and your company to scrutiny. Take into account the attitude of the staff towards you, and ask about the level of experience the lender has had with this type of business loan. There are certain lenders who will only allow companies operating in a specific industry to get Commercial Equipment Leasing from them while other lenders lend to almost all companies, provided these are financially sound.

It would be nice if you had contacts among the owners or managers of other similarly-sized companies and ask them for referrals to lenders. These small company owners or managers will be able to give you insider info on how these lenders operate, how they were treated during the loan processing process, and the experience of the small company owners or managers with making payments on the Commercial Equipment Leasing loan. A crucial question to ask your contacts is: if you need to, would you ask for a Commercial Equipment Leasing loan from the same lender or choose another?

If you do succeed in getting through the initial steps of securing a Commercial Equipment Leasing loan, try asking what payment options are open to you from that preferred lender. Do they require fixed monthly payments alone, or can you be given the skip lease option (which means you can stop paying during lean months when company earnings are weak)? Another option is a step-up lease payment plan, meaning you start paying low amounts then move up to the higher payment amounts incrementally. The lender might also have what is known as a 60-day deferred commercial equipment leasing plan that doesn’t ask you for a downpayment but will defer your payments for two months. Its counterpart is the 90-day commercial equipment leasing plan that will defer your payments for three months, and also needs no downpayments.

Tiana Nelson asked:


What is the first thing that comes to a small business owner’s mind when they need money to start or grow their business? More often than not, it’s a bank loan. Unfortunately, it is also one of the most difficult ways to finance a small company since banks are regulated institutions and have to adhere to many rules that are difficult for small businesses to satisfy. What are the alternatives? The two options that we will look at today are equipment leasing and commercial mortgages. Both of these tools present an excellent opportunity for business owners and yet are often overlooked.

Equipment Leasing

Equipment leasing is an excellent choice for a startup or existing business especially if your business uses a significant amount of equipment to make their operations efficient. What are the examples of equipment that can be financed? Just about anything that is used for a business: landscaping equipment, auto shop equipment, telecommunication equipment, medical equipment, metalworking, bakery equipment, restaurant equipment, etc.

Why does equipment leasing present an excellent option for business owners? It is usually a quick and efficient way to obtain financing. In many cases startups can get up to $20,000 by providing an application only. Companies that have been in business for 2-3 years are looking at up to $50,000 with an application only. That means there is no need to gather paperwork and a quick and easy submission and decision. In many cases you will hear back within 24-48 hours about a decision on your lease, which means you are closer to your goal so much faster. Larger amounts are usually available with full documentation packages. Many lease programs also have special features such as 3-6 month deferrals that allow businesses time to start earning revenue with their equipment.

In addition there are many more benefits to equipment leases including potential tax savings, predictable fixed payments, and 2-7 year terms. Many people do not want to consider leasing for fear they would not own the equipment at the end of the lease. Modern lease programs offer you a variety of end of the lease options including $1 buyouts where you pay $1 at the end and the equipment is yours. Another thing that comes up – people actually want to use their cash and not borrowed funds. That might sound like a great idea, but actually it is not since debt provides a business owner with leverage to catapult them to higher growth. Debt when used correctly is an excellent instrument for growth. Cash is best used for working capital needs.

Commercial Mortgage

Commercial mortgage is another excellent financing tool for a small business. If a company owns their current location, it is a great idea to consider pulling equity out to finance business expansion, consolidate debt, remodel or open another location. For companies that do not own their locations and are paying rent, it is always a great idea to run the numbers to see if it would make more sense for them to own the property.

One thing that usually stops business from pursuing this option is the lack of small commercial mortgage options. The options that maybe available typically require large down payments and strong tax returns. These are all valid reasons unless you know a business consultant that works with small commercial loans.

Preferred Capital Alliance, Inc. has started offering small commercial mortgages this week. These are the loans specifically targeted at small business owners. The maximum loan amounts are $1.5 million and they cover such property types as office, retail, warehouse, mixed use, self-storage, multifamily, mobile home parks and more! What’s even better is now a qualifying small business can acquire their business location with as little as 3% down. In addition to full document programs we also offer stated income programs that would benefit many business owners, which for one reason or another are not able to prove their income with tax returns.

In addition to acquiring property for your business, you can also refinance your existing property and/or invest into an income producing commercial property. The process is quite simple and we will walk you through each step. Just imagine in about 45 days you can own your business location or supplement your income with a commercial investment property! The possibilities are endless.

Pulling out equity from your commercial property often represents one of the cheapest options to finance your growth. Acquiring a commercial property instead of renting is also a smart decision in many cases.

All in all, there are many ways to finance companies, and bank loans are certainly not the only option. The smart thing to do is to find a reputable business finance company that can narrow down the options and help you obtain financing.