Credit Criteria

What kind of companies do we approve for a Lease?

We approach every application with one overriding objective:  We want to provide to each applicant the best possible terms of approval.  Too many banks and credit unions have severely narrowed their ‘credit window’ so that only very strongest of applicants are able to obtain approval. In today’s very anxious credit environment, we consider multiple ways to approach each transaction.  The end result of our work is to provide not only APPROVAL, but the best possible terms of approval for each applicant.  In most situations, we are able to provide multiple options to choose from, and we offer our applicant advice and perspective about each of the available options.  We help each applicant to make an informed decision about which option is best for them.

The truth is, we only make money on approvals and fundings.  In fact, it costs us money every time we can’t find a way to approve an application, so we maintain a singular focus on solutions that will lead to doing business with you today and building a relationship for your future needs as well.

The credit business remains equal measures of art and science.  INFORMATION is the central resource, the “raw material” that we use to create solutions for our customers.

Our basic guidelines:

Credit qualification requirements vary but generally every established business with a good credit record can lease equipment.  Our best terms are available for businesses which are two or more years old, and have been under their current ownership for at least that long.

We also approve new businesses and companies that have recently changed ownership.

  • You will need to provide the exact legal name of the business, when it was started and who are the owners.
  • Bank references are contacted to confirm the length of time the account has been established and to obtain an average deposit balance.  (Generally, we need to see a minimum average banking balance of $1,000+.  All business bank accounts can be considered, including, perhaps, the company’s payroll account, merchant account and savings accounts.)
  • We want to contact several trade references for payment history related to our applicant.
  • Depending on the dollar size of our applicant’s credit request, or the age of the business, we may need financial statements for the business, its owners, or both.
  • Personal guarantees are generally required from the owners of closely held corporations or newer businesses.  Even when a personal guarantee is not required, we will do a “background check” on the credit bureaus of the principals of a closely held company.  To learn more about why we usually require personal guarantees, click here.

We are able to approve up to $75,000 on an “application only” basis for qualifying customers which are established at least 2 years under the current ownership. As a general rule, larger transactions will require financial disclosure in order to be approved.

New Businesses:

A LOT of equipment that is acquired by businesses each year is acquired by companies in their very early years.  Lease $mart has several attractive programs that allow us to approve funding for companies which are less than 2 years in business; even companies that haven’t yet opened for business can be approved!

For new businesses, the credit and financial strength of the owners will be of primary importance and their personal guarantees will always be required.  Additionally, we may ask to review business plans, pro-forma financial statements, customer and supplier contracts, management résumés or other pertinent information so that we can reach a level of comfort that our Lessee is prepared for business success.

We Also Approve:

  • Non-Profit Organizations
  • Municipalities
  • Tribal Governments
  • Strong Credits in Foreign Countries
  • Proprietorships, Corporations, LLC’s & Partnerships

Why do we usually require Personal Guarantees on leases?

As a matter of practice, we generally don’t do an in-depth analysis of your business plan, market potential or competitive position.

It has been our experience that the success of most (almost all) small business is based substantially on the existing ownership’s talents, their industry contacts and their commitment to the success of their business venture.  So we rely heavily on the commitment of the owner(s) as an indication of the confidence they have in the business.  The owner’s personal guarantee indicates a high degree of confidence by the owners in the future of their business and its ability to meet its obligations.

We can and do provide ‘Corporate Only’ approvals (without personal guarantees) when the company has sufficient history and strength.  Be sure to let us know if you need to have approval without personal guarantees.