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Is It Difficult for a Small Business to Get an Equipment Lease?

When starting or expanding your business, you will need equipment such as furniture, electronic devices, and software. You can either choose to buy them outright or to borrow them using a lease or loan. The latter option is often preferable, especially for small businesses that might not have the resources to buy all the top-notch tools they need. An equipment lease allows you to conserve your capital while remaining flexible at the same time.

But how hard is it for a small business to receive such a lease? Will it be prohibitively expensive? The answer is that several factors affect your eligibility, and they include the age of your business, your financial stability, and the size of the lease you are asking for. Today, we will have a closer look at how we evaluate businesses and what you can do to increase your chances of a positive outcome.

How Hard Is Getting an Equipment Lease? 

It’s not always easy for a small business to get started. If you have a physical location, you will need to pay for staff, rent, furniture, and professional equipment. Having to pay for everything upfront might make it almost impossible for you to open a new branch. However, this isn’t usually the case. Lenders such as Noreast Capital allow you to lease your equipment so you can spread out the cost and allow your business to grow before you pay.

When considering you for a lease, we will take several factors into consideration. Depending on your company’s age and the profit you are making, we might offer you a lease line of credit. When you’re ready to borrow your first piece of equipment, you won’t have to apply again, and we will simply be able to provide it. Your personal account manager can let you know how much you may be able to borrow.

The Age of Your Business 

A crucial factor is how long you have been in operation. Most lenders prefer companies that have been running for at least two years because they have had time to become established and make a profit. Such businesses have records of their sales and expenses, which allows creditors to see whether they are making a profit and how much they will be able to pay.

However, just because you’re a new business doesn’t mean you won’t be eligible. There is a chance that you can borrow from us even if you are just getting started. To make a decision, we will look at the financial background of the owners. You will almost certainly have to back your lease with a personal guarantee in such a case, and we might ask you for additional documentation like your business plan or your supplier contracts.

The Financial Health of Your Business 

Every high-quality lender will do their due diligence before issuing a small business with a lease. When you apply to Noreast Capital, we will require you to provide certain financial documents. They include bank statements, trade references, or financial statements. To make the process easier, you should have all your paperwork in place before you contact us.

Once you have provided us with the necessary documentation, the equipment lease application process is surprisingly straightforward. Depending on the size of your lease, you might receive an answer within a few hours or a few business days. You can then select the tools that best fit your needs and either pick them up or have them delivered to your location.

The Size of the Lease 

Before providing you with a lease, we will check that you are able to handle the amount you applied for. Smaller and newer businesses should get started with a minimal amount so that they don’t run into problems later on. As your company grows, you can then increase the size of your debt to help you expand faster.

In general, amounts under $50,000 are reasonably easy to receive. If you are an established firm, you won’t even have to provide us with financial statements, and the application is a simple one-page form. Any amount over this threshold will be checked more closely since your monthly payments could be substantial.

Ways to Ensure Eligibility 

As you can see, getting a lease for your business isn’t extremely difficult, but lenders do check that you have a sound financial background. The process is easiest for businesses that are over two years old and are able to demonstrate solid and steady performance. If you don’t fall into this group, there are several ways you can ensure eligibility.

For example, you can back your lease with a personal guarantee, which means that you will be liable if your business can’t pay. Alternatively, a guarantor with a stable background could help. Your account manager might ask you to provide documentation such as your business plan, resumes from the company’s founders, and pro forma financial statements, which can prove that you are experienced in your field and on track to make a profit.

Why Leasing Could Be a Great Strategy for You 

Getting a lease is possible for most businesses, but it will take some time and effort. Is it worth the hassle? In most cases, the answer is yes. Not only can you conserve your precious capital, but you can also remain flexible and adapt to changing market conditions more quickly. The type of lease you get can be tailored to your company’s needs, and you can choose from a wide variety of equipment, no matter what industry you operate in.

Conserve Your Capital 

Arguably the most important reason why you should lease your tools is that this allows you to conserve your money. If you are a new business, you might not have the option to buy everything you need, so leasing is the way for you to start out with high-quality equipment. For more established businesses, it is a way to grow faster and reinvest your capital to expand the company.

When opening a new branch, you might have to pay for additional employees as well as rent. This can be enough of a financial burden, and leasing the furniture and equipment can take some of the pressure off. That way, you might be able to expand faster and therefore make more of a profit in the long run.

Retain Flexibility

Another key benefit of an equipment lease is that you don’t have to lock yourself into an expensive deal. Our terms are often between 12 and 36 months, and at the end of the lease, you can choose to keep the tool, give it back, or take out another lease. If your needs have changed or the market is different, you can simply choose something else.

This is particularly important when it comes to equipment that is time-sensitive, such as electronic tools and software. These items need to be updated frequently, but they can also be extremely expensive. By getting a lease, you can stay on top of current trends and upgrade much more frequently, since you didn’t spend all the money upfront.

Choose a Plan that Suits You 

Every company is different, which is why we at Noreast Capital offer such a wide range of leases to suit various needs. If you already know that you would like to buy the equipment at the end, you can go for a capital lease, which allows you to purchase the objects at a minimal price, such as $1, once your lease is up. If not, you can opt for a contract that offers you multiple possibilities at the end, such as giving back your equipment or upgrading.

Brand-new business might benefit from a special contract that doesn’t require payment for the first few months. You will be able to build up a clientele before having to worry about paying for your equipment. Similarly, seasonal businesses can pay less during the quiet months and more when they are busiest to prevent cashflow problems.

Choose from a Wide Variety of Products 

In terms of the equipment you can lease, there is an enormous variety available. In addition to furniture, you can also choose from a wide range of industry-specific tools and electronic gadgets. In fact, we even offer software for accounting, client interaction, graphic design, and more. No matter what you need, you should speak to our customer service team, who can present you with all the options.

Getting an equipment lease can be a challenge for small businesses, but it is not impossible. As long as you have a good financial history, have been in business for a few years, or are willing to personally guarantee the lease, you should be able to borrow all the equipment you need. The best way to find out more is to get in touch with a lending company and explain your situation.

You will be allocated an account manager, who can take you through the application process and help you increase your chances of getting a great deal. They might speak to you about the kinds of financial documents you need to provide and how much equipment you can expect to borrow. Call us today at Noreast Capital to find out more and open your lease line of credit.

How Do Equipment Leasing Companies Work?

If you run a business, you know how much equipment is needed in the workplace. From fax machines and printers to computers and specialized hardware, a lot of different equipment goes into running a successful business. Top equipment leasing companies like Noreast offer an excellent range of services to help businesses grow and ensure they have the necessary facilities to serve their customers.

How Do Equipment Leasing Companies Work?

The Basics

Many folks don’t realize the benefits of leasing office equipment or even that leasing equipment is possible. In fact, it’s becoming an increasingly popular practice, allowing businesses of all sizes to expand their operations in a cost-effective manner.

And there are so many different options, allowing you to get the best deal for yourself and your business. Whatever you’re looking for and whatever your needs, leasing could be an amazing option for you.

What Kinds of Equipment Can You Lease From Top Equipment Leasing Companies?

When it comes to leasing, if you can think of it, you can get it. All kinds of equipment are available, allowing you to expand your business capabilities. From simple office furnishings like desks and chairs to printers, fax machines, and printers, you’ll be able to get exactly what you need.

Standard office equipment is often leased as standard, including desks and chairs, but more specialized options, like medical or culinary equipment, are also available. Equipment is normally ordered straight from suppliers, so you’ll benefit from an enormous range of quality products.

Top-Quality Customer Service

When you lease from Noreast, you’re guaranteed excellent customer service. You’ll be assigned a representative to take care of you and your company, ensuring you get the best out of your lease and have access to support whenever you need it. You can call your representative within business hours or access online help whenever you need it, ensuring round-the-clock support.

Not only will your representative be available to help with any questions about the process and any issues that may come up, but they’ll also provide the training your staff will need to operate the equipment, giving you a complete, well-rounded customer experience. As one of the top equipment leasing companies in the country, we’re committed to going the extra mile for our clients.

Which Businesses Can Lease Equipment?

All kinds of businesses are making use of equipment leases, but it’s a particularly popular option with small and mid-size businesses. In the modern world, start-up costs are increasing, and customers demand increasingly specialized equipment. That’s why the cost-effectiveness, flexibility, and added bonuses which come with equipment leasing are a great option for all kinds of businesses.

Established businesses that have been running for a year or 2 and built up a strong credit rating will find it easiest to lease equipment. But new businesses can lease too, with certain extra requirements and conditions. Whatever the status of your business, be sure to gather as much relevant information and documentation as possible, including credit reports and bank statements. Our staff will work with you to ensure the right deal for you.

Flexibility

There are as many different kinds of lease agreements as there are types of equipment to lease. Whatever kind of equipment you’re looking for, however long you need it, and what you want to happen at the end of the lease are all flexible. Whether you want to end the agreement, purchase your equipment, or upgrade to new equipment, you’ve got the options you need.

The different options offer something to suit all kinds of businesses and each has its own distinct advantages. Whichever deal you choose, you’ll benefit from our expertise, as well as the added bonuses of a lease agreement.

The Fair Market Value Lease

For a flexible deal that offers the chance to acquire your leased equipment on a permanent basis, the fair market value lease is a great deal. This deal gives you multiple options at the end of your lease, allowing you to buy your equipment at market value come to the end of the agreement if you wish. You can also choose to return or upgrade the equipment.

If you do wish to retain your equipment at the end of the lease, we offer financing options to suit your needs. This is a great way to enjoy flexibility when you’re not sure what route you’ll be taking some months down the line.

10% Purchase Option

Another agreement that offers both flexibility and great financing options is the 10% Purchase Option. This arrangement allows you to buy your leased equipment at a fixed 10% of its original cost. At the end of your agreement, you can still choose to return the equipment if you decide you don’t want to buy it after all or continue the lease if that’s more appropriate for your needs.  

It works almost like a standard financing agreement, only with no hidden costs, added flexibility, and dedicated customer support. This is an increasingly popular option with businesses of all kinds.

The $1 Buy-Out

This lease is popular with folks looking to expand their inventories slowly and sustainably. It allows businesses to buy their leased equipment at the end of the agreement. As the name suggests, it allows customers to buy their equipment at the end of the lease agreement for a dollar, so it’s perfect for businesses who are certain they want to retain the equipment they’ve leased.

While this agreement functions similarly to a standard purchase on finance, the fact you’ll avoid interest is a huge advantage, while it also offers flexibility in the event you decide you don’t want the equipment after all.

10% Security Deposit Lease

Offering the lowest monthly payment of any lease agreement, this option is perfect for businesses looking to pay a nominal upfront fee, then benefit from low costs throughout the leasing agreement. You’ll pay a 10% security deposit up front and benefit from lower costs throughout the agreement. This is one of the cheapest ways for any business to access new equipment.

At the end of the agreement, you won’t lose your deposit as long as you’ve adhered to terms and conditions. The deposit can also be used to extend the lease or be refunded on return of equipment, offering yet another degree of flexibility. The usual options to return equipment or extend the lease are available too.

Other Lease Options

Certain Specialized lease options are also available for businesses with different requirements. Seasonal leases are available for companies that experience limited cash flow at certain times of the year. This is perfect for businesses needing equipment at only certain times of the year. Step leases are a good option for newer businesses, offering lower payments to begin with and slowly increasing over the course of the agreement.

For those on a budget, a deferred payment plan is a deal, allowing you to begin payments between 60 and 90 days after taking delivery. This deal is perfect for businesses expecting to drastically increase revenue streams after leasing equipment, for example, companies hiring a new cohort of salesmen.

The Benefits

There are so many benefits to choosing to lease your office equipment, rather than buying it or getting it on finance. The affordable and flexible structure of leasing allows you to invest in plenty of equipment that might otherwise have been too costly for you to buy outright. Many businesses only need equipment for a set period of time, perhaps leasing half a dozen desks and computers for a few temps hired for a year-long project.

It’s also a great way to save on storage and maintenance. And many businesses use leasing as a way of quickly writing off obsolete technology. In the hyper-advanced times we live in, equipment is often rendered obsolete within a year or 2 of manufacture, meaning you lose prestige and appeal in the eyes of your clients.

Is Leasing Right For You?

If you’re looking for accessibility, value, and flexibility, leasing is absolutely right for you. A simple look at the benefits and flexibility on offer will be enough to convince most business owners, and the top service you’ll receive from Noreast staff should underline what a great option this is for your company.

It saves you having to store and maintain a bunch of equipment you don’t need in the long term. It’s also an incredibly economical option. No interest rates allow you to spread the cost without needing to invest in costly and complicated financing procedures.

The Process

The leasing process couldn’t be easier. You’ll select your preferred leasing agreement, the equipment you need, the length of time you need it for, and the supplier you want to lease from, then make an application to the leasing company. Our experienced and helpful staff will assist you every step of the way, helping you over any hurdles that may arise.

You’ll arrange financing and the details of the lease, then pay a deposit before taking delivery of your equipment. At that point, you’ll benefit from the equipment you’ve leased and be able to use it to your advantage as you grow your business.

Want to begin the leasing process or find out more? Contact Noreast Capital today for a great deal!