When partnering with a financing company, it’s important for equipment vendors to understand how the process works for their customers. Even if you’re not the one executing the loan application process, you may still receive questions from potential and existing customers on what to expect from start to finish. Here’s a quick look at how equipment lenders approach the application review process.
Many equipment vendors might assume they know how business lending works, but the application process can vary greatly from lender to lender. One of the benefits of working with a business lender is their ability to deal with the many variables involved. While an individual personal loan may require a certain credit score, equipment lenders can use many other pieces of information to make a decision. Business history is one of those factors. To qualify for a loan, equipment vendors can recommend companies that have been operating for at least a year.
Loan Amount and Revenue
Loan applicants applying through equipment vendors also have a few financial criteria to meet. Typically, a loan amount is granted as a percentage of the company’s total annual revenue.
Lenders base this on the previous year’s tax returns. Another qualifying factor is monthly deposits, which at a minimum should be at least $8,000 a month.
Fast Review Process
A final important aspect of equipment lending is the application review process and the time it takes to get funding. Many equipment vendor customers may be under strict time constraints, especially if they’re seeking emergency replacement equipment. The approval process can be as fast as 12 to 24 hours. Once that is complete, borrowers can get funded in as quick as 24 to 48 hours.
Equipment vendors can help facilitate the loan process by managing customer expectations and pointing them in the right direction to a reliable funding source. By incorporating a third-party lender like CMS Funding on your website, you’ll eliminate barriers and help the purchasing and financing processes go more smoothly. A strong partnership between vendors and lenders is critical to maximizing the customer experience, with excellent service and seamless integration between purchase and financing.