info@noreastcapital.com 410-268-5588

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 I Lease Equipment for My Business?

Business equipment leasing is growing at a rapid rate, as more and more firms are realizing that they don’t have to spend their cash upfront on the tools they need. If you’ve never borrowed equipment before, you might be wondering how you can gain access to business leasing and whether this is a complicated process. Fortunately, it is quite straightforward, and most companies are eligible.

Once you know what items you want and have compiled all the financial documents you might have to provide, you simply have to contact a lender. They can help you get what you need within a few days, and you’ll have your own account manager who can assist you throughout the process. Let’s have a closer look at how equipment leasing works and whether it’s the best option for your firm.

How to Access Business Leasing

The equipment leasing industry has expanded rapidly in recent years, as more and more businesses are making use of the benefits of spreading out the cost of their purchase. Great deals are easiest to access through a comprehensive lender who works with many companies offering business tools. That way, you can get everything you need from the same place and benefit from better rates as a result.

To get started, you need to work out what you actually need, then have a look at your financial situation to find out how easy it will be for you to access a lease. There are several things you can do to increase your creditworthiness. Once you have an idea of where you stand, you can get in touch with a lender like Noreast Capital, who will pair you with a dedicated account manager. This professional will help you access financing within a few business days.

Take Stock of What You Need

The first thing you must do is decide what items you’d like to lease. While some businesses decide to purchase some tools upfront, others borrow everything they need to get started. This latter option could be useful if you don’t yet know how your company will develop over the next few years and you want to remain flexible.

Keep in mind that you can borrow a wide range of equipment, and this goes beyond physical items such as desks, chairs, electronic devices, and an HVAC system. In fact, we also offer various types of software you might need for designing, accounting, and interacting with your customers. Before making a final decision, browse your lender’s website to see what’s on offer, or get in touch with them and ask.

Figure Out Your Financial Situation

Most businesses are eligible for leasing. However, there is an application process, during which your credit will be checked. Lenders generally prefer working with companies that have been in operation for at least two years and have a good credit rating. We might also accept newer businesses or startups, but the founders will need to have a high credit score.

You can increase your chances of getting a good deal by offering a personal guarantee, which means that you will be responsible for paying if the business fails to do so. What’s more, you can offer us business plans and financial statements. Such documents can demonstrate that your company is viable and making a profit. If you’re hoping to borrow equipment that is very costly or you’re a new business, this might be a requirement.

Get in Touch with a Lender

After figuring out what you need and compiling your financial documents, you can get in touch with your lender and start the application process. In many cases, this will be very simple, so it’ll take you only a few minutes. If you are looking to borrow less than $50,000, you should receive an answer from us within one hour of sending in your application.

Businesses that need to borrow more expensive items might have to wait for one to two business days before receiving an answer. If you’d like to ensure access to a lease, you can open a lease line of credit ahead of time. With this option, you’ll have financing in place whenever you are ready to start using the equipment.

Why Lease Your Equipment?

As you can see, getting business leasing isn’t very complicated, and it can be set up very quickly, as long as you are well-prepared and in a good financial position. But is it the best option for your business? Why do so many companies choose to lease when it is generally more expensive than buying products outright? There are many reasons why you might choose this option.

Most commonly, companies want to keep their capital and reinvest it into expanding their business more quickly, instead. However, you might also benefit from a lease if you’re a new firm and don’t yet have access to large amounts of money. Borrowing equipment can help keep your business more flexible, so you can change directions or benefit from innovations more quickly.

Keep Your Capital

The primary reason most businesses opt for leasing is that it allows them to keep their money. Many of the companies we work with have very solid business plans, and they can use their capital to expand their operations and make a profit. In this way, leasing can lead to higher revenue, and the small additional cost is well worth it.

Similarly, small startups might not yet have the money needed to purchase everything they require. They can opt for either a loan or a lease. The latter is more flexible and can provide them with better value. Over time, they will build up more capital, and they can then choose to either upgrade the lease or pay off the items and keep them.

Remain Flexible

An additional benefit of leasing is that your firm retains much more flexibility. When you buy a large device or machine outright, you might have to use it for 5-10 years to make the purchase worth the cost. By that time, the piece of equipment might be outdated, or your business may have gone in a new direction.

Our lease terms usually run between 12 and 60 months, and you have control over what happens in the end. If you are still happy with the equipment, you can buy it off us, but if you’d like to upgrade or choose something different, you can give it back and sign a new lease. That way, you can more easily adapt your operations to changing market conditions.

A Lease for Every Business

At Noreast Capital, we understand that every business is different, and we want to help you achieve your goals more efficiently. For this reason, we offer a variety of leases which can suit various companies. Because leasing is so flexible, you will never have to worry about being left behind or not being able to afford the newest technology. Your dedicated account manager can help you find the terms and duration that best suits you.

Keeping Your Options Open

When you first speak to us, we will discuss what your goals are and why you are taking out a lease. There are certain contracts that specify what happens at the end. For example, a capital lease transfers ownership of the item to you for a token sum once your lease term is up.

However, there are other options that have a more open end, which means you can delay making a decision until the end of your lease. That way, you can test out the item and see whether it’s a good fit. If so, you might want to buy it from us. Alternatively, you could give it back and upgrade, or you could return it and end your lease.

Special Requirements

Some businesses have special requirements, and we can cater to that. For instance, very new companies or firms that are setting up a second office might not immediately see a return on their investment. We can help you by delaying your payments for a few months, so you can focus on gaining customers and getting set up.

Other companies, such as accounting firms, have a seasonal business model. We can tailor your lease to these fluctuations in income, and you will pay us more during your busy season and less during the quiet times. Your account manager can speak to you about these options.

If you need equipment but don’t want to spend a large amount of cash, business leasing could be the perfect way forward. You simply figure out what you need, gather all the documents to prove you are a responsible borrower, and then speak to a lender who provides the items you need. The process is usually quick, and you may get your lease in place within a few business days.

There are many benefits to leasing your tools, the main one being that you keep your capital and can use it to invest in your business. This will allow you to grow much faster and at a lower cost. What’s more, you’ll be more flexible, and you can access updated or innovative products that would otherwise be out of reach. Contact us today at Noreast Capital to find out whether you qualify for a business equipment lease.