The information required to apply for an equipment lease is based on the dollar amount of the lease. Generally speaking equipment leasing for small businesses may be broken down into two categories; small ticket ($3,000 to $50,000) and mid-ticket leases($50,000 to $500,000.)

Necessary Information:

1. Lessors require a completed and signed credit application that typically includes:
   • Exact legal business name, including any trade styles and Federal ID number.
   • Form of business i.e. corporation, LLC, sole proprietorship or partnership.
   • Home address and Social Security Account Number(s) for business owners or majority shareholders.
   • Bank and trade reference information.
   • Business description.
   • Description of equipment and dollar amount of requested.
   • Name, address and contact of equipment and dollar amount requested.
   • Term of Lease requested
2. Information required in addition to the above for mid ticket equipment includes:
   • Two (2) year-end business financials including both the income statements and balance sheet and all notes.
   • Comparative interim statement if the year-end is more than six months old.
   • Two (2) years of business tax returns.
   • Two (2) years of personal tax returns for each personal guarantor.
   • Current personal financial statement for each personal guarantor.
     

GENERAL CREDIT PARAMETERS

In general, the items considered by the credit departments of small and mid ticket equipment lessors include the following:

1. Business:
   • Time in business, minimum of 2 to 5 years in business (same ownership) with the higher end of the equipment cost range requiting a longer time in business.
   • Commercial information reports (D&B, TRW Business, and Business Credit USA).
   • Bank and trade references credit history. As agreed trade history(PAYDEX >65)
   • Type of business and the need for the equipment.
   • Management history, including prior business experience.
   • Size of the business, including the number of employees.
   • Financial strength of business.
   • Confirmation of actual business operations and linkage of ownership of the business through independent sources including commercial business reports, online directories, etc.
   • Legal structure of business.
2. Principals:
   • Principal guarantees required on all closely held corporations.
   • Credit bureau reports (Trans Union, TRW, CBI) and the generic score(s). Fico Scores >620 to a minimum of 675 or greater at the high end of the equipment cost range.
3. Equipment:
   • Most lessors have a limitation on soft costs included in a lease such as software, installation and freight.
   • Most lessors are also not able to offer leasing on boats, planes, GPS, gaming, adult entertainment, leaseholder or fad equipment.
4. Industries:
   • Most lessors will not provide leasing for owner-operators, vending routes or start-ups.

* Contributions to this page was provided by:
Mark Gullett
Manufacturers' Lease Plans, Inc
602-944-4411 Ext. 12