Small business loans are tough to get in today’s economy. If you have do not have good credit it’s even harder. Then what happens if you are in a “high risk industry?” Banks think of categories like construction, real estate, restaurants, multi-level marketing, and many others as “high risk” industries and they either don’t lend to them at all or they make it even more difficult for small business owners in those industries to get bank financing.
So imagine if you own a construction company and you do not have good credit and you need a small business loan or you need equipment financing to purchase some equipment to grow your business. You’ve been around for a few years and times have been tough but you’re still alive and doing pretty well despite the fact that your revenues haven’t grown much the last few years…or maybe they’ve been on the decline.
Well, there’s hope. There are lenders who offer equipment leasing and equipment financing options for people like this as long as you have some collateral. Here’s a recent story of a client we helped in a situation like this. They could not qualify for an unsecured business line of credit even though that’s what she wanted. She knew she needed a small business loan to buy a rolloff tractor trailer for a new contract she got from the city. It was going to grow their revenues significantly. The problem was that her FICO score was under 550 and she was currently past due on her mortgage for her primary residence where she lived.
So here’s what we did. We took 3 of her existing trucks in her fleet and offered them along with the new truck she was purchasing as collateral with the lender. Two of the three existing trucks had existing equipment loans or equipment leases already in place on them and the other truck was owned free and clear with no financing. We paid off the other two loans and then packaged the entire deal as one equipment lease with one monthly payment. This meant she had one monthly payment instead of three and all of this was an equipment lease instead of being an equipment loan so she has a huge tax benefit now in addition to creating a cash-flow home run for herself.
There is hope if you don’t have good credit and you need a small business loan or some kind of business credit solution. This story is just one way to “skin the cat” so to speak. Let us know if you have a situation where you need some business financing and are not sure how to do it or what the best path forward is. We help clients every day with solutions like unsecured business funding, equipment loans, equipment leases, SBA loans, factoring, and many other solutions.