Why, How, & Where Else to Look
We’ve seen it happen too many times, business owners with solid plans get denied for financing. Maybe it’s credit history, industry risk, or cash flow concerns. Whatever the reason, a denial isn’t the end of the road. There are other ways to secure the equipment your business needs to grow.
Why Banks Might Deny Your Equipment Financing Application
- Credit score issues – Banks often require strong personal and business credit.
- Insufficient cash flow – Lenders want to see consistent revenue that can support loan payments. Additionally, if your business account frequently ends in the red, banks see it as a risk.
- Industry Risk – Some sectors, like construction or transportation, are seen as high-risk.
- Time in business – Startups and younger businesses struggle to meet minimum requirements.
- Minimal trade lines – Limited credit history or lack of vendor accounts can be a red flag.
- Low PayNet score – A measure of your business’s creditworthiness based on payment history, debt levels, and industry trends. A low score signals higher risk to lenders.
How to Improve Your Chances of Securing Equipment Financing
- Boost your credit – Consider paying down debt, resolving discrepancies, and building positive payment history.
- Improve cash flow – Consider cutting unnecessary expenses and increase revenue before reapplying over a 3 month period.
- Consider offering collateral – Some lenders may approve loans with equipment or other assets as security.
- Work with a co-signer – A partner with strong credit may help secure financing.
- Consider increasing trade lines – Think about opening vendor accounts and consistently pay on time to build credit history.
- Improve your PayNet score – Request your reports and improve payment consistency to raise your score.
Alternative Lenders, Manufacturer Financing, and More: Your Equipment Financing Options
- Equipment financing companies – Not all are banks, meaning they can take more risks, approve younger business (as little as 3 months in business), and offer flexible terms.
- Alternative lenders – Online lenders and fintech companies may provide financing options with different approval criteria than traditional banks.
- Manufacturer financing – Many equipment sellers offer in-house financing or leasing programs, making it easier to secure funding.
- Local credit unions – Sometimes more willing to work with small businesses than big banks, especially those with strong community ties.
How to Choose the Right Equipment Financing Lender for Your Business
Consider researching lenders who specialize in your industry. Read reviews, compare terms, and ask about approval criteria. Many alternative lenders offer pre-qualification without impacting your credit score, so exploring your options can help you make an informed decision.
Getting denied by a bank isn’t the end—it’s just a detour. With the right approach, you may find financing that works for YOU.
Learn More
For inquiries, reach out to
Leslie Brown
Leslie@makglobalcorp.com
www.MakGlobalCorp.com
Disclaimer: This content is for informational purposes only and does not constitute financial, tax, or business advice. Always consult a professional before making any major financial or business decisions.
