As a premier Canadian equipment finance company, we love businesses that are growing. We love to see a company grow and obtain capital to meet its goals. From a start up business, to an established company, we at Lionhart Capital Ltd can get businesses the money to buy the new equipment required.
In partnership with over 40 lenders for over 35 years, we have funded equipment purchases ranging from $25,000 to $50 million. As a result, these clients are now friends, and we remain their best access to capital for all their growth and expansion needs.
With the COVID-related changes in the economy, companies looking for equipment financing should consider where they fit into a risk model and how a lender will look at their company and operating history.
To assist every business in getting approved, big or small. Consider a few suggestions to help you get the equipment funding you need.
Current Credit Markets
The credit markets have always been a complex web of banks, hedge funds, big corporations, brokerages, and the Federal Reserve. Credit has been easy to obtain from Fintech companies because of loosened credit guidelines. They have their credit limitations, but the competition between them require additional risk to compete.
For the past few years, the consumer driven economy was starting to come back to life. Now, however, lenders are cautious because of another wave of the virus. Each credit desk carefully evaluates new transactions with an eye towards what could go wrong if we approve this company and thus interest rates are on the rise.
What is a Financial Presentation for any Business?
The chance a bank is hungry for your business and willing to take a risk in your venture is gone. Because you think your business rocks doesn’t mean a lender will share your enthusiasm. You will need to prove to them that you know how to make money. Let us help you with our years of expertise. We can submit your transaction on your behalf to our group of lenders and present it the best way possible.
What every business looking for capital needs to have ready.
The company last 2-3 years of financial statements and interim statements
Profit and loss accounting for the past 2-3 years. (If there were significant losses, you would be wise to detail what happened and how these issues were resolved)
Details of the corporate structure and ownership
A detailed list of equipment needed and how it will impact the business.
Personal financial statements from any owner of more than 20%
If your operation is a start-up, we will require job contracts and personal guarantee
What is a Personal Guarantee?
A personal guarantee is a promise from the owners that they will back the personally in case of default. It is an unsecured personal guarantee that functions as a second line of security for a lender.
Why do equipment Lessors and Lenders Expect It?
Leasing companies have required a personal guarantee unless the company’s financials are strong enough. A promise from the owner tells a lender that you’re confident enough to back it up. If the main guys don’t think the project will work, they will walk if it doesn’t go well. They are leaving only an equipment liquidator to come in and clean up the mess.
If you are not willing to back up your request with a PG, the chances of you getting capital are remote.
Conclusion
At some point in your history, you decided to take a shot and start a company. You survived through the first few years working 24/7 and sacrificing much along the way. Finally, you have a bright future and the capital to acquire the equipment needed to get the job done. Following these guidelines outlined in this blog will give you a much-improved chance of getting the money required to grow the business.
Suppose you need more information on how to stage your company for approval. Then, just let us know in the comment section below.