Your business is growing, but your credit isn’t great. We’ve seen it here before at American Equipment Financial Services. We’ve had business owners get in contact with us and ask about our credit requirements, assuming they wouldn’t even be approved. Some wouldn’t even apply had we not had some initial conversations to let them know that while credit can be hugely important in the commercial lending space, it isn’t the whole picture. Let’s briefly talk about a couple options to consider:

Number One: Cash Flow

In a recent Friday Q&A we talked to one of our reps about a customer in the logging industry who had poor credit, and was trying to find a way to acquire a John Deere Skidder because they knew it would be a benefit to their business long-term. Their cash flows were looking pretty solid, and they were able to put together a balance sheet and income statement to show evidence of that fact to get them an approval. It has to be noted that you will need to be prepared for potential higher down payments and rates. While we mentioned that credit isn’t everything, it will still play a factor. But if you’re looking at equipment that’s going to increase your revenues, and even offset what you will be paying monthly on the equipment, isn’t getting that approval worth it? If you’re ready to grow your business, and know your cash flows are strong, but you are worried about your credit, make sure to talk to your rep about the positive aspects of your cash flow to overcome any obstacles that may come up due to your credit score.

Number Two: Collateral

Another way to help overcome low credit when looking to acquire logging equipment is with collateral. Many lenders will be able to find an approval if there is sufficient collateral put up according to their requirements. Be aware that those requirements may change from lender to lender, so make sure you have those conversations early so you can make sure that your proposed collateral is sufficient. With collateral as an added security, lenders can have more confidence in moving forward in circumstances where challenging credit is an issue. We often ask for this information upfront on our PreQualification Form to make sure that the option is front and center to make sure we can find a way to help customers of various credit profiles.

We hope this helps give you an idea of the options that may be available to you in the logging industry if you’re looking to get new or used logging equipment. We would also like to note, as we did in the above linked Q&A, that if you have a more challenged credit profile, you may need to factor in a little more time for the deal to progress. Often times, multiple avenues are being explored to make sure that an approval can be found that best fits your circumstances. Stay patient, and work along with your finance officer, and the payoff of that new revenue-producing machine will be worth it!