Securing an Equipment Lease: A Comprehensive Guide for Business Owners

If your business needs equipment financing and you've chosen equipment leasing as the best option, the next step is to secure approval. Here’s how to ensure a successful lease application.

In this guide, we’ll explain what lenders look for, what information you need to provide, and share tips to help you through the process.

#### Common Reasons for Lease Application Rejections

Businesses often fail to get approved for equipment leases because they can't convince lenders of their ability to repay the lease. Lenders want to minimize the risk of default, which involves costly and complex repossession and resale processes.

#### Lender Considerations When Approving a Lease

Lenders evaluate several factors to determine the risk involved in providing an equipment lease. Here’s what they typically look for:

**Business Track Record**

For leases over $50,000, lenders usually require two years of business financials. Startups can also get approvals by providing personal financial statements, tax documentation, contract offers and a solid business plan.

**Equipment Details**

Lenders need to understand why your business needs the equipment and how it will benefit your operations. They also consider the equipment's resale value. Items with broad market appeal are less risky than specialized machinery for niche markets.

**Credit Report**

Your credit report offers a detailed history of your financial management, answering key questions about your payment habits, any defaults, bankruptcies, and your overall credit utilization. New businesses can build a healthy credit history by making timely payments on small loans, credit cards, and utility bills.

**Credit Score**

A credit score is a snapshot of your financial health. In Canada, scores range from 300 to 900. Higher scores indicate lower risk for lenders. Improving your credit score can enhance your lease approval chances.

**Co-Signer**

In some cases, lenders may require a co-signer to provide additional security. A co-signer ensures that the debt will be repaid even if the primary borrower cannot meet the obligations. Common scenarios for requiring a co-signer include weak credit ratings, limited business experience, low income, or startup status.

#### 3 Essential Tips for Getting Approved

Understanding what lenders are looking for can significantly increase your chances of approval. Here are three essential tips:

1. **Provide Detailed Information**

- Be thorough in your application and include as many details as possible about your business and equipment needs. The more information lenders have, the better they can assess your case.

2. **Ensure Accuracy**

- Double-check all information before submitting your application. Inaccuracies can lead to rejections, as lenders verify the details you provide.

3. **Professional Financial Statements**

- Having an accountant prepare your financial statements can add credibility to your application, enhancing your chances of approval.

#### Ready to Apply for an Equipment Lease?

At EquipEASE Lease Co., we are here to assist you in gathering all necessary documentation and preparing a comprehensive credit package. We work with a wide range of lenders to find the best financing options for your equipment purchase.

Contact us today to get started on securing your equipment lease and take your business to the next level.

Call or email, for a complimentary consultation to determine if leasing is the right fit for your needs!

Call us at 1-844-250-EASE

Email us at info@equipease.ca

Follow us on Facebook @equipease and Instagram @equipease