Financing – The Lease Process
- Submit application by fax, phone, mail, or internet
- Credit review (bank, trade, loan/lease information)
- Upon approval – documents are sent to Lessee for signature and returned
- Purchase order is faxed to dealer upon receipt of signed lease documents
- Dealer sends original, hard copy invoice
- Phone call is made to Lessee to verify equipment is there and works properly
- Check is sent to dealer via Fedex
- Lease payments begin about 30 days after delivery of product
General Requirements For A Standard Lease
(Up to $50,000 – Requires Application Only)
- Must be a business: There are no “personal” leases. You do not need to be a corporation.
- History: You must show that you have been in business for at least one year.
- Business Is Dated By One Or More Of The Following: Business checking account, business license, tax return, Schedule C, trade references, etc.
- Clean personal credit of “key”owner/s: No active judgments, liens, charge-offs, bankruptcy, slow payments of personal debt. Some slowness may be acceptable with written explanation. (Not applicable for well established and/or larger Corporations).
- Current and/or previous bank account reference: Should date business back one year or more. If your bank account is less than two years old – please provide your previous banking information.
- Personal checking account used for business may be acceptable.
- Minimum average daily bank balance: Must be $1,000 or more. Savings, money market, CD type of accounts should be included on the application if business checking balance is low.
- Trade reference examples: Equipment supplier, equipment rentals, landlord, other studios that carry an open account, office supply stores, etc.
- Trade references: Must have at least a one year history. Trade reference should report that you have an open account with them and pay your bills “according to terms” or “as agreed”. Personal credit card accounts, personal vehicle leases or COD accounts cannot be used as trade references.
- Phone listing: Business should be listed in local phone directory (does not need to be in the Yellow Pages). Home studios are usually exempt from this requirement.
Frequently Asked Questions And Answers
- Start -Up Business: Start-ups can only be done if the individuals show the ability to make the payments weather the current business makes money or not. Requires personal financial statements and tax returns. Applicant must have a background in the industry.
- Dealer/s: You pick which dealer/s you want to use. And, you can have more than one dealer.
- Name Change: It is not unusual for a business to change its name. If the current business name is less than two years old, please provide us with the previous business name and bank reference information.
- Equipment: We only need a general equipment list and amount to process the application. Upon approval, an exact equipment list and pricing is needed to prepare lease documents. It is a good idea to send in the application while you finalize your equipment list.
- Personal Guarantee/s: Business under five years old requires personal guarantee/s of “key” owners. Corporations may elect to have one person authorized to sign the lease. Personal guarantees are not required on public companies or well established businesses with Dunn & Bradstreet ratings. Each request to have the guarantee waived is reviewed on an individual basis
- Insurance: May or may not be required to fund. However, if the equipment is damaged, stolen or destroyed, you are still liable for payments. Required or not, you should insure your equipment.
- Rates: Rates are contingent upon perceived risk. The more established the business, the lower the rate. There are no hard and fast rules. We do not charge for the approval process. There is no obligation if you don’t want to continue the lease process. Payment quotes are given after the credit process is completed. A general quote is available upon request.
- I’ll Get The Best Rate By Shopping Companies: Almost always untrue. In fact, shopping to multiple brokers can cause damage to your credit report and result in a rejection. Direct lenders almost always have the best rates and don’t “shop” the lease causing credit damage.
- New Ownership: New owners do not necessarily mean you are a “start up” business. Simply list your previous business name or provide us with a separate cover letter telling us about the changes. Also, provide us with bank and trade references from the previous business.
- Collateral: The equipment is the collateral in most cases. However, a newer business or weaker credit may require additional collateral for approval. Accepted collateral is generally – Cash Down, CD’s, Cross Guarantee From A Related Business, additional A/V equipment, etc.
- Personal Lease: There are no “personal” leases. Equipment leasing is for businesses only. There is no correlation between a car lease and a business equipment lease.
- Business Credit Makes Up For Poor Personal Credit: Since most companies are closely held, clean personal credit is required. There are some exceptions. Ask if you are not sure.
- Tax Returns Don’t Show A Profit: Remember, we do not look at financial statements in most cases. Your business is qualified through bank and trade references only.
Start-Up Or New BusinessPersonal Lease / Start-Up Lease:
- $2,000 – $15,000
- NO business bank or trade references required
- Must have established credit. (Examples: credit card, car loan, mortgage, etc.)
- NO business background required
- Equipment must be used for business purposes
- APPROVAL within four hours!!
$15,000 – $1,000,000
Businesses Are Dated By One Or More Of The Following:
- Business Bank Account
- Business License
- Tax Return or Schedule C
- Trade References
- Amount $15,000 to $100,000:
- Show average daily bank balance above $1,000 (business and/or savings, etc.)
- Must have two active trade references
- Requires last years personal tax return of “key” owners/s
- Personal financial statement of “key” owner/s
- Completed Lease Application
- Requires last three years personal tax return of “key” owner/s
- Personal financial statement of “key”owner/s
- Completed Lease Application
- Must show ability to make the payment with current income and/or net worth
- If you you have filed tax returns as a proprietor for over two years – you are not considered a start up business.
- Opening a new room or adding a partner does not necessarily mean you are a start-up.
- Buying out a partner does not mean you are a start-up.
- If your tax return shows you are in the Audio/Video industry as a Producer, Engineer, etc., you may not be considered a start up.