Not so long ago financial institutions were giving out these huge loans and lines of credit for clients that were unworthy of paying back the loan. These institutions ended up getting severely burnt on the back end with delinquent and historically charge-off loans. The approval for these home loans and lines of credit tightened up immensely in the last few years. However, depending on the type of loan you are looking for, there may be a great opportunity to be on of the many who are already getting approved in the market.
If you are in need of equipment financing, you may be in a great position. In March, the Equipment Leasing and Financing Association (ELFA) concurred that this is a great time to partake in an equipment loan or lease. In February, the amount of new loans for financing for equipment decreased by 6% to equal $ 4.7 billion, which is the lowest number the industry has seen in the past two years.
The credit institutions, whether banks or independent, are very eager to get these equipment loans into the hands of business owners for a couple of reasons. First off, because these loans are not charged money on the balance sheet of the banks, like a line of credit, they are less risky for banks. Also, individuals that take on a manufacturing lease, construction loan, or any other type of equipment financing end up with an asset that produces revenue for the company overall as a result of these leases. This makes the motivation to pay loans back and also on time a lot higher. The nature of these loans makes them among the lowest in the industry – 2% – when it comes to delinquency. Charge offs are even lower at a rate of 4%.
If you are even thinking of an equipment lease, now is the time to talk to a bank or an independent financial institution. They will work with you even if you have bad credit to get a loan that is appropriate for you. Equipment Financing firms have been at a 74% approval rating when it comes to clients which is a high number. Some rates on these loans are even as low as 2% -5%. Make sure you speak with a specialist that has had lots experience in all types of loans and leases so that you can get the best information to find the most appropriate for you.