How To Get The Best Rate On Your Bad Credit Equipment Lease

How To Get The Best Rate On Your Bad Credit Equipment Lease
Some people consider an equipment lease to be a secured business loan. And feel that
the equipment should be the only form of collateral. But when you are a business
owner seeking equipment leasing with bad credit, you may need to provide additional
collateral.
Tip #1 If you have bad credit, be ready to explain your credit situation. Bad credit
equipment leasing can be done. But it takes a little bit more time. And an
understanding of what most bad credit lenders want. Obtain a copy of your credit
report and be prepared to explain what happened to make your score so low.
If you have at least 3 months before you need the equipment, then try to improve your
credit score. If there are inaccuracies on your credit report, report them to the
credit reporting agencies. Credit repair takes time, it’s not an overnight thing. If
you don’t have the time to fix your credit on your own, you may want to contact a
legitimate credit repair company. It’s in your best interest to get your credit in
order. Even if credit repair won’t bring you up into the 700 credit score range. But
if you start off at a 518 and in 3 months have a 625. The type of equipment lease,
rate, lease amount, length of time the bank will give you the lease can be drastically
different!
Tip #2 Look at your equipment lease as a secured business loan. Not only will the
equipment be used as collateral, but if your credit score is below a 600, be prepared
to offer some additional collateral. It can be additional business equipment, real
estate, or a larger security deposit. Whatever you use as collateral should be
unencumbered. No lease or loan against it.
Tip #3 Get your finances in order. You want to show the bank or finance company that
your business is financially sound. Be prepared to show 6 months of your business
bank statements. If you don’t have 6 months. Be prepared to give them some of your
personal bank statements.
Tip #4 Be prepared to be offered a short term if you get approved. Most bad credit
equipment leasing companies will only carry a bad credit lease for 36 – 48 months.
Depending on the business owners credit. Sometimes it might only be 24 months!
Tip #5 Understand your lease buyout. Some bad credit banks will give you a $1 buyout
at the end of your lease. Meaning at the end of your lease you pay $1 and you own it.
But some will only offer you a Fair market value. Meaning at the end of the lease you
pay a percentage of the equipment worth and you can own it.
Tip #6 Look for a bank or finance company that WANTS to work with business owners with
your credit score. Sites like Leasefunders.com specialize in providing bad credit
equipment leases to their clients.
Things to keep in mind. A $1 buyout lease will have a higher monthly payment then a
Fair market value lease. The fair market value lease is a lease preferred by business
owners who
1. Currently can’t pay the higher monthly payment of a $1 buyout
2. Or They plan on returning the equipment at the end of the lease and don’t plan
on paying the buyout
Equipment leasing provides numerous advantages to bad credit business owners. It’s
important to understand how to present your equipment lease in the best light.